Keith Browning Posted June 13, 2008 Share Posted June 13, 2008 Quote: Cat And Navistar To Focus On Global Truck Business And Cooperate On Engine Technologies PEORIA, Ill., June 12PEORIA, Ill., June 12 /PRNewswire-FirstCall/ -- Caterpillar Inc.(NYSE: CAT) and Navistar International Corporation (Pink Sheets: NAVZ) havesigned a Memorandum of Understanding (MOU) to pursue global on-highway truckbusiness opportunities and cooperate on a variety of engine platforms. Thetwo companies intend to focus on global truck opportunities, including NorthAmerican severe service construction trucks, as well as technology developmentfor engines worldwide."We are pleased to be matching the formidable talents and technologyleadership of two industry leaders to serve an expanding base of engine, truckand equipment customers worldwide," said Jim Owens, Caterpillar Chairman andChief Executive Officer. "As the world leader in construction equipment anddiesel engines, Caterpillar is now positioning itself for growth in theon-highway truck market. This is an important step for Caterpillar and welook forward to working with Navistar for the continued benefit of ourcustomers.""This relationship is a perfect example of Navistar's strategy of growththrough leveraging our own assets and those that others have built," saidDaniel C. Ustian, Navistar Chairman, President and CEO. "In partnership withCaterpillar we intend to extend our leading-edge product focus that we have inNorth America into the rest of the world."Through this alliance, Caterpillar plans to target a 2010 introduction ofa North American Cat branded heavy-duty truck for severe service applications,such as road construction, large infrastructure projects and oil and petroleumdevelopment. Concurrent with this new strategic direction, Caterpillar hasdetermined independently that it will not supply EPA 2010 compliant engines totruck and other on-highway original equipment manufacturers (OEMs)."Caterpillar and our dealers will continue to provide product support andservice beyond 2010 for all Caterpillar on-highway engines regardless of truckbrand," said Douglas R. Oberhelman, Caterpillar Group President. "This newtruck -- targeted for 2010 -- will incorporate the legendary quality ofCaterpillar's construction and mining machines and provide constructioncustomers a one-stop solution. In addition, with nearly 90 percent of ourengine business being off-highway, we'll continue to concentrate on oursubstantial and growing opportunities to supply engines in the petroleum,marine, electric power generation and industrial markets -- as well as produceengines for our own construction and mining equipment."The companies have commissioned teams to focus on the truck and engineopportunities. The initiatives contemplated by the MOU are subject tocompletion of due diligence, execution of definitive agreements and regulatoryapprovals.Global Truck CollaborationThe companies intend to work together to develop, manufacture anddistribute commercial trucks in select regions outside of North America. Theproduct offering would include a full line of medium and heavy-duty trucks inboth conventional and cab over designs."The combination of Navistar's truck design, development and manufacturingexpertise and Caterpillar's unparalleled worldwide distribution creates asignificant advantage for global customers through the ability to offer theright vehicle for the right application through more than 4,700 points ofdistribution around the world," said Dee Kapur, President, Navistar TruckGroup. "The North American Caterpillar distribution system provides expandedreach for severe service trucks with big bore power, a segment where Navistarhas traditionally not been as focused.""This is a natural extension of Caterpillar's more than 40 years servingon-highway customers with proven, award winning technology -- combined withunsurpassed global distribution and product support," said George Taylor,Director of Caterpillar On-Highway Engines.In addition to the United States and Canada, Navistar has a substantialdistribution network in Mexico and Latin America. Caterpillar currently sellson-highway truck engines in Australia and New Zealand, Mexico and throughoutLatin America, as well as in the United Kingdom, Belgium, Russia, China andSouth Africa.Engine TechnologyUnder the alliance, Caterpillar and Navistar plan to cooperate on enginedevelopment, incorporating "best in class" technologies from both companies.Caterpillar and Navistar intend to work together on development of mid-rangeengines for diesel applications, such as school buses and utility trucks.This engine development would support each company's stated path not toutilize urea-based Selective Catalytic Reduction (SCR) technology."There are many opportunities for technology sharing and development thatwould result in the ability to better meet the worldwide demand for dieselengines in both on and off-highway applications," said Jack Allen, President,Navistar Engine Group."In the past 15 years, Cat has become significantly less dependent on thesale of on-highway truck engines in the total contribution of our globalengine profitability," said Oberhelman. "Our global power systems businesshas grown significantly -- in fact we supply approximately 400,000 dieselengines annually outside of the on-highway truck market. We intend to remainthe world leader in clean diesel engines, and this collaboration is a keyenabler."Remanufacturing Growth and Additional SynergiesThrough the alliance, the companies also intend to expand their existingremanufacturing relationship to include Navistar's recently introducedMaxxForce on-highway engines. The companies expect to pursue additionalremanufacturing opportunities as new vehicles and engines are developed.Caterpillar and Navistar plan to explore opportunities to leverage theirscale. Combining raw material and other commodity purchases is just oneexample of how the two companies can work together to reduce costs.About CaterpillarFor more than 80 years, Caterpillar Inc. has been making progress possibleand driving positive and sustainable change on every continent. With 2007sales and revenues of $44.958 billion, Caterpillar is the world's leadingmanufacturer of construction and mining equipment, diesel and natural gasengines and industrial gas turbines. The company also is a leading servicesprovider through Caterpillar Financial Services, Caterpillar RemanufacturingServices, Caterpillar Logistics Services and Progress Rail Services. Moreinformation is available at http://www.cat.comAbout NavistarNavistar International Corporation traces its roots to 1831 and the formerMcCormick and International Harvester companies. Today Navistar is thelargest North American producer of mid-range diesel engines and Class 6-8commercial trucks and buses. Navistar Defense is a leading producer ofadvanced armored vehicles and trucks for the U.S. Armed Forces and its allies.Navistar produces International® brand commercial trucks, MaxxForce branddiesel engines, IC brand school and commercial buses, and Workhorse brandchassis for motor homes and step vans, and is a private label designer andmanufacturer of diesel engines for the pickup truck, van and SUV markets.Navistar is also a provider of truck and diesel engine parts. A wholly ownedsubsidiary offers financing services. Additional information is available at:http://www.navistar.comCATERPILLAR SAFE HARBORCertain statements in this release relate to future events andexpectations and as such constitute forward-looking statements involving knownand unknown factors that may cause actual results of Caterpillar Inc. to bedifferent from those expressed or implied in the forward-looking statements.In this context, words such as "will", "would", "expect", "anticipate" orother similar words and phrases often identify forward-looking statements madeon behalf of Caterpillar. It is important to note that actual results of thecompany may differ materially from those described or implied in suchforward-looking statements based on a number of factors and uncertainties,including, but not limited to, changes in economic conditions; currencyexchange or interest rates; political stability; market acceptance of thecompany's products and services; significant changes in the competitiveenvironment; epidemic diseases; changes in law, regulations and tax rates; andother general economic, business and financing conditions and factorsdescribed in more detail in the company's Form 10-Q filed with the Securitiesand Exchange Commission on May 2, 2008. This filing is available on ourwebsite at http://www.cat.com/secfilings. We do not undertake to update ourforward-looking statements."NAVISTAR SAFE HARBORInformation provided and statements contained in this report that are notpurely historical are forward-looking statements within the meaning of Section27A of the Securities Act, Section 21E of the Exchange Act of 1934, and thePrivate Securities Litigation Reform Act of 1995. Such forward-lookingstatements only speak as of the date of this report and the company assumes noobligation to update the information included in this report. Suchforward-looking statements include information concerning our possible orassumed future results of operations, including descriptions of our businessstrategy. These statements often include words such as "believe," "expect,""anticipate," "intend," "plan," "estimate" or similar expressions. Thesestatements are not guarantees of performance or results and they involve risks,uncertainties and assumptions, including the risk of continued delay in thecompletion of our financial statements and the consequences thereof, theavailability of funds, either through cash on hand or the company's otherliquidity sources, to repay any amounts due should any of the company's debtbecome accelerated, decisions by suppliers and other vendors to restrict oreliminate customary trade and other credit terms for the company's futureorders and other services, which would require the company to pay cash andwhich could have a material adverse effect on the company's liquidity positionand financial condition, and the inability of Navistar and Caterpillar toreach agreement on the terms of any collaboration and the success of any suchcollaboration. Although we believe that these forward-looking statements arebased on reasonable assumptions, there are many factors that could affect ouractual financial results or results of operations and could cause actualresults to differ materially from those in the forward-looking statements.For a further description of these factors, see Item 1A. Risk Factors of ourForm 10-K for the fiscal year ended October 31, 2007, which was filed on May29, 2008.SOURCE Caterpillar Inc.; Navistar International Corporation Quote Link to comment Share on other sites More sharing options...
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