Navistar International Corp. (NYSE: NAV) is still in trouble after it had to cancel its big engine initiative. While that blunder may have cost billions of dollars when all was said and done, the company continues to try moving along. A deal previously had been announced with Cummins Inc. (NYSE: CMI) and now that final agreement is being set.
The company issued a press release confirming that definitive long-term supply agreements for heavy-duty diesel engines and emissions after-treatment technologies have been reached. Navistar will offer the Cummins ISX15 in its International ProStar+, PayStar and 9900 models; Navistar also will utilize the Cummins Emission Solutions after-treatment system for the company's proprietary heavy-duty big bore engines.
It is important to know that Carl Icahn has taken the activist actions to influence Navistar. The aim is to get things back on track. Whether that effort ultimately will succeed remains to be seen as shares remain very weak. Navistar even said that this effort will help in its goal of offering customers a "proven, reliable and fuel-efficient clean engine technology."
Navistar will start the pilot building of the International ProStar+ with the Cummins ISX15 in November 2012, and shipments are expected to start in December 2012. The International ProStar+ with MaxxForce 13 and the Cummins Emission Solutions SCR-based after-treatment system will start the initial pilot production in March 2013, and the regular production is projected to start in April 2013. The remaining line-up of heavy-duty truck models will transition to SCR-based clean engine technology in a phased launch throughout 2013 based on volume and customer demand.
Navistar shares are up 1.3% at $19.30 on a mixed market day, but the 52-week trading range is $18.47 to $48.18.
JON C. OGG