Navistar Board Approves Investment in Next Generation Truck
15 October 1997
Navistar Board Approves Investment in Next Generation TruckNext Generation Trucks Strengthen Competitiveness Well Into Next Century CHICAGO, Oct. 15 --The Board of Directors of Navistar International Corporation yesterday approved funding for the company's next generation truck (NGT), including capital spending, and investment in product and process development. The funding provides for creation of new medium and heavy trucks and school bus chassis, and significant improvements in assembly operations. "This investment will make Navistar competitive well into the next century," said John R. Horne, chairman, president and chief executive officer. "More than that, these initiatives will deliver solid financial returns to shareowners, as they will help our truck business meet our minimum criteria of 15-percent return on assets. "This action represents another significant step in implementing our five point truck strategy, which includes new product development, reducing product complexity, focusing our plants, expansion to serve Mexico and Latin America, and achieving competitive wages, benefits and productivity levels." The investment includes approximately $350 million in capital spending and $300 million in development expense. Outlays will be made over the next six years, and include the following elements: * Development of a full line of medium trucks and chassis, school bus chassis, and regular conventional heavy trucks and chassis. * New state-of-the art process controls and material management programs to improve production efficiencies in the truck business. * Tooling and equipment for a next generation of medium trucks to be built at the company's Springfield, Ohio manufacturing facility. * Transformation of the Springfield plant into a low cost, world-class medium truck manufacturing facility. The plant will include a state of the art stamping and cab assembly operation. Implementation of the development and design phase of NGT will begin immediately. Product introductions will begin mid 2001 and continue approximately every six months through 2003. The product development plans and aggressive transformation of the Springfield Assembly plant reflects the new, close working relationship between Navistar and the UAW that resulted in a new labor agreement reached August 19, 1997. The agreement provides for increased flexibility in job design and use of modular construction techniques. The landmark agreement was key to Navistar's efforts to build the new trucks and buses and improve the company's overall competitiveness. The scope of this program is broader than that announced in June 1996 which included $269 million in capital and $180 million in development expense for NGT. Navistar International Corporation, with world headquarters in Chicago and 1996 revenues of $5.8 billion, is the leading North American producer of heavy trucks, medium trucks and school buses. The company is the sales leader in the combined United States and Canadian retail markets for the first nine months of the fiscal year, achieving a 27.1 percent share that is consistent with the same period a year ago. The company also is a worldwide leader in the manufacture of mid-range diesel engines, which are produced in a range of 160 to 300 horsepower. SOURCE Navistar International Corporation