PEORIA, IL - Caterpillar Inc. and Navistar International Corporation   announced the next phase of cooperation between the two companies to develop, manufacture, sell, and support vocational and on-highway trucks for the North America market and the rest of the world.

In June of 2008, the two companies announced plans to form an alliance for the on-highway truck business. This led to the creation of a 50/50 joint venture called NC2 Global LLC. NC2 is focused on the development of on-highway trucks for markets outside of North America, including current truck offerings in Australia, South Africa and Brazil. The two companies also have an agreement to produce Cat heavy-duty vocational trucks for North America. Earlier this year, the Cat® CT660 vocational truck was unveiled at the CONEXPO/Con-Agg 2011 trade show and customer deliveries of the trucks have recently started.

Now Caterpillar and Navistar are moving to the next stage in the relationship, with continued focus on customers around the world. Building on the success of the companies' strategic relationship to produce Cat heavy-duty vocational trucks for North America, the companies will restructure certain aspects of NC2. Under the terms of this new relationship, NC2 will become a wholly owned subsidiary of Navistar and through a new brand licensing agreement, both International and Caterpillar branded trucks will continue to be distributed through both International and Caterpillar dealers outside of the United States.

"This next phase will move the relationship to a structure and business model that will be similar to the business relationship we have with Navistar for our North American vocational trucks," said George Taylor, Director of Caterpillar's Global On-Highway Truck Group. "As we have looked at the success of the Cat vocational truck launch in North America, we believe that a similar business model for commercial trucks for the rest of the world makes the most sense for our customers," Taylor added.

In addition to the current CT660 vocational trucks that are being produced for customers in North America, Caterpillar and Navistar have also signed a new, non-binding memorandum of understanding to develop a new, cab-over-engine Cat vocational truck that would be sold globally. The companies will finalize the terms of this new business in the coming months.

"This new relationship streamlines the organization and will help us move faster and more efficiently," said Phil Christman, President of NC2. "Customers and dealers in the global markets where NC2 has established distribution will build on their early successes with no interruption and with the added benefit of getting products sooner."

Caterpillar and Navistar have a long-standing business relationship that has evolved over many decades. In addition to the truck business, Caterpillar currently provides remanufacturing services to Navistar and is also a key supplier of engine components for certain Navistar engines. Navistar currently supplies engines to Caterpillar for certain power generation and marine applications.