WARRENVILLE, IL – Amid rumors that it will switch its engine-emissions strategy, Navistar International has scheduled a webcast Friday, July 6 to announce “an update to various operational matters related to the company,” according to HDT magazine (www.truckinginfo.com), Work Truck magazines heavy-duty sister-publication.
“The live webcast is scheduled at approximately 9 a.m. ET,” said a statement directed at the Federal Securities & Exchange Commission (SEC). “Speakers on the webcast will include Daniel Ustian, chairman, president, and chief executive officer; A. J. Cederoth, EVP & CFO; and other company leaders.”
Company executives aren’t saying what matters they’ll discuss, but rumors have it that Navistar will switch from its troubled Advanced Exhaust Gas Recirculation (A-EGR) method to exhaust after treatment, similar to the selective catalytic reduction (SCR) used by all its competitors, according to HDT. The two methods aim to meet the Environmental Protection Agency’s (EPA) 2010 emissions limits, which concentrate on virtually eliminating nitrogen oxide.
The Wall Street Journal reported that Navistar plans to switch to SCR for its engines. On Friday, June 29, the newspaper said Navistar was considering resumption of engine purchases from Cummins, which supplied pre-2010 diesels for International trucks and still supplies diesels for export-model Internationals.
Cummins switched its strategy from all EGR to EGR-plus-SCR several years ago, and now builds SCR engines for Freightliner, Western Star, Kenworth, Peterbilt, and Volvo. Those engines have proven more reliable and less costly to operate than the A-EGR engines from Navistar, according to fleet reports.
Navistar has fielded 2010-certified diesels that don’t quite meet the regulation’s absolute limit for NOx. Later, the agency allowed continued sales of heavy-duty engines by means of the company paying non-conformance penalties of about $1,900 per engine. But, a federal judge threw out that arrangement in a suit brought by competitors, and Navistar has had trouble trying to certify a 13.0L engine that meets the absolute NOx limit of 0.2 grams compared to 0.5 grams now. Its medium-duty engines continue in production under EPA credits that are good into 2013, a company spokesman has said.
Meanwhile, billionaire investor Carl Icahn and hedge-fund manager Mark Rachesky recently raised their stakes in Navistar to 11.9 percent and 13.6 percent, respectively. Icahn has been pushing for Navistar to merge with Oshkosh Corp., in which he is major shareholder, and Rachesky said in a June 25 disclosure statement he planned to talk to management about Navistar’s “business, operations, strategy, and future plans,” according to the Daily Herald of suburban Chicago, where Navistar is headquartered.
As a result, the company reported two straight quarters of massive financial losses, and its stock price has steadily fallen. However, the stock price strongly rebounded on the reports that Navistar would offer Cummins engines in 2013, the Daily Herald reported.
The outside pressures, legal entanglements, financial woes and product problems have harmed Navistar’s ability to manage its business and sell trucks, according to HDT. High-warranty costs have caused many of the recent losses, executives have said.
Up to now, offering Cummins engines and/or switching to SCR were not options, because top executives declared that they would not build trucks using SCR.
Friday’s webcast will deal with these issues and others, observers believe. The webcast will be available through a link on the investor relations page of Navistar’s website, http://ir.navistar.com/events.cfm. Investors, press, and others should log on to the website at least 15 minutes prior to the 9 a.m. EDT start to allow sufficient time for downloading any necessary software, the Navistar statement said.
By Truckinginfo.com staff
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