Delco Remy International Subsidiary and Navistar Form Joint Venture
11 December 1998
Delco Remy International Subsidiary and Navistar Form Engine Remanufacturing Joint Venture
ANDERSON, Ind., Dec. 10 -- Power Investments, Inc., a
subsidiary of Delco Remy International, Inc. and Chicago-based
Navistar International Corporation today announced the formation
of a joint venture to provide remanufactured engines and component parts for
service replacement.
Under the agreement, Magnum Power Products, the newly named joint venture,
will be the worldwide remanufacturer for designated International(R) brand
diesel engines and certain private label brand engines designed and
manufactured by Navistar. Power Investments, Inc. will provide the
remanufacturing expertise while Navistar will provide the technical and
engineering support.
Initial remanufactured products to be provided by the joint venture will
include the 7.3L V-8 turbo diesel Ford Power Stroke(R) brand, the
International(R) brand T444E direct injection V-8 diesel engine, and related
engine components, including cylinder blocks, connecting rods, crankshafts,
cylinder heads, water pumps and high-pressure fuel pumps. Through the joint
venture, Navistar is Ford Motor Company's sole authorized remanufacturer of
7.3L V-8 turbo diesel engines.
It is anticipated that the joint venture will remanufacture the new "V"
engine products when it is appropriate for those products to be
remanufactured.
Daniel Ustian, Navistar group vice president and general manager of the
engine division, noted that production of the company's 7.3L V-8 diesel has
grown from 126,000 units per year in 1994 to nearly 300,000 units in 1998.
"This agreement is a major step forward to strengthen and expand quality
remanufacturing for our leading technology products," Ustian said. "Market
demand for the V-8 product has challenged us to increase production nine times
in the last four years and has created a significant opportunity for this
remanufacturing joint venture, with nearly one million engines produced since
1994."
Power Investments is an industry leader in engine remanufacturing with
more than 16 years experience in remanufacturing engines for the
International(R) brand. Power Investments' QS9000-certified remanufacturing
operations repeatedly receive the highest customer quality and performance
awards in the industry. This newly formed joint venture will ensure customer
satisfaction by maintaining quality remanufacturing processes for Navistar's
engine division, a world leader in diesel technology.
"We are excited about the continuing growth of this powertrain business.
It builds on the 16 year supply association we have had with Navistar," said
J. Michael Jarvis, president of Power Investments, Inc. who will be chairman
and president of the new venture.
Delco Remy International, Inc. , the parent company of Power
Investments, Inc., became a public company with an initial public offering of
stock in December 1997. The company designs, manufactures, remanufactures and
distributes electrical, powertrain/drivetrain and related components for
automobiles and light trucks, medium and heavy-duty trucks and other heavy-
duty vehicles. Products include starter motors, alternators, engines,
transmissions, traction control systems and fuel systems for original
equipment and aftermarket applications.
Navistar International Corporation, with world headquarters in Chicago,
and 1998 sales and revenues of $7.9 billion, is a worldwide leader in the
manufacture of mid-range diesel engines, which are produced in a range of 160
to 300 horsepower for the International(R) brand, and a private-label designer
and manufacturer of diesel engines for full-size pickup truck and van markets
and selected industrial and off-highway markets. The company is also the
leading North American producer of heavy and medium-duty trucks and school
buses. Navistar maintained its position as the leader in the combined U.S.
and Canadian retail markets for medium and heavy-duty trucks and school buses
for 1998, achieving a 28.9 percent market share for the International(R) brand
trucks, which is 0.3 percentage points higher than a year ago.
Statements in this press announcement, which are not historical facts, are
forward looking statements that involve certain risks and uncertainties
including, but not limited to risks associated with the uncertainty of future
financial results, acquisitions, additional financing requirements,
development of new products and services, the effect of competitive products
or pricing, the effect of economic conditions and other uncertainties detailed
in Delco Remy International's filings with the Securities and Exchange
Commission.