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Navistar, Siemens Automotive Form Joint Venture

29 March 1999

Navistar, Siemens Automotive Form Joint Venture To Produce Next Generation Diesel Fuel Injectors In North America

            $100 Million Investment in Green Diesel Technology(SM)
              Designed to Reduce Emissions, Improve Air Quality

    CHICAGO and AUBURN HILLS, Mich., March 29 -- Navistar
International Corporation, Chicago, Ill. , and Siemens Automotive
Corporation, Auburn Hills, Mich., today announced they have finalized
previously announced plans to form a joint venture to develop and manufacture
next generation diesel fuel injectors incorporating proprietary digital valve
technology under license from Sturman Engine Systems, L.L.C.  Capital
investment in the joint venture is estimated at $100 million.
    Siemens Automotive owns 51 percent of the joint venture, which will
operate as Siemens Diesel Systems Technology, L.L.C.  The joint venture, which
is expected to reach production levels of 4 million injectors per year by 2005
or sooner, will assume a leading position in the North American market for
diesel injectors.
    The joint venture will develop and manufacture electronically controlled,
hydraulically actuated low-pressure injectors for use in diesel fuel systems
designed and manufactured by Navistar's Engine and Foundry Division.  The
injector incorporates proprietary Sturman digital valve technology under
license from Sturman Engine Systems, L.L.C.
    Navistar will contribute expertise for the electro-hydraulic system and
its applications in engines and vehicles.  Siemens Automotive will contribute
fuel delivery technology and high volume manufacturing capability at a site
yet-to-be-determined in the southeastern United States.  It is anticipated
that the joint venture will create up to 500 new jobs.
    The fuel injection system is scheduled to be ready for commercial use by
the 2002 model year.  The new technology will benefit Navistar's International
brand trucks and buses, as well as products of other major customers in both
North and South America.
    Dan Ustian, Navistar group vice president and general manager of the
Engine and Foundry Division, said the fuel injection system, intended for
heavy, medium and light diesel engine applications, will help Navistar and its
customers meet reduced diesel emission standards in advance of the 2004
compliance deadline for reduced diesel emissions set by the Environmental
Protection Agency.
    "We are committed to developing leading-edge fuel system technology that
builds on our history of industry innovations," Ustian said.  "By creating
Green Diesel Technology approaches that use this proprietary digital valve
technology, we will meet customer expectations for performance and society's
demand for clean air solutions."
    Dr. Klaus Egger, senior vice president of Siemens' global Automotive
Systems Group and leader of its diesel initiative, said although Siemens'
history in diesel technology is young, the company's history as a leader in
electrical/electronic solutions spans 150 years.  "As systems integration
began to emerge as a key enabler toward the advancement of diesel technology,
we began to invest aggressively in developing this area of expertise," Egger
said.  In addition to the joint venture, by 2000, Siemens will have invested
more than $55 million in diesel systems capabilities.
    Navistar International Corporation, with world headquarters in Chicago,
and 1998 annual revenues of $7.9 billion, is a leading North American producer
of heavy and medium trucks and school buses.  The company is also a worldwide
leader in the manufacture of mid-range diesel engines which are produced in a
range of 160 to 300 horsepower for to International(R) brand and a private
label designer and manufacturer of diesel engines for the full-size pickup
truck and van markets and selected industrial and off-highway markets.
    Siemens Automotive Corporation is the U.S. arm of Siemens Automotive
Systems Group, a tier-one supplier of automotive electrical-electronic
components and systems with a sales volume in 1997/98 of $3.3 billion.  To
maintain its leadership as a global supplier of automotive fuel injection
systems, Siemens Automotive reinvests as much as 10 percent of sales in
research and development annually.  Siemens Automotive Systems Group is part
of Siemens AG, one of the largest electrical-electronic engineering companies
in the world.  Generating sales of more than $66 billion in 1997/98, Siemens
AG employs some 416,000 people worldwide.