Navistar to take restructuring charges

Oct. 30, 2002
Navistar International Corp. said yesterday that it would take a restructuring charge of up to $456 million in the fourth quarter. The truck and engine maker said the charge is considered necessary because its truck engine agreement with Ford Motor Co. is in doubt and because it is leaving the Brazilian truck market. A pretax charge of up to $210 million will be taken because of the delay and possible
Navistar International Corp. said yesterday that it would take a restructuring charge of up to $456 million in the fourth quarter. The truck and engine maker said the charge is considered necessary because its truck engine agreement with Ford Motor Co. is in doubt and because it is leaving the Brazilian truck market.

A pretax charge of up to $210 million will be taken because of the delay and possible cancellation of a 1998 agreement to provide Ford with V6 diesel engines for the F-150 pickup truck, Econoline 150 vans, Ford Expeditions and Lincoln Navigators from model years 2002 through 2012.

According to Navistar, Ford said the agreement is no longer viable and the timing of its completion is unknown. With the contract agreement, Navistar built an engine assembly plant in Huntsville, AL and developed a V6 diesel engine, which it could sell only to Ford.

Under its joint venture Blue Diamond Truck Co., Ford and Navistar will still build Class 6 and 7 commercial trucks at Navistar's plant in Escobedo, Mexico.

Navistar said it will exit the Brazilian truck market Thursday, resulting in a pretax charge of up to $70 million.

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Tim Parry

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