Caterpillar Inc. and Navistar International Corp. have signed a Memorandum
of Understanding (MOU) to pursue global on-highway truck business
opportunities and cooperate on a variety of engine platforms. The two
companies intend to focus on global truck opportunities, including North
American severe service construction trucks, as well as technology
development for engines worldwide.
"We are pleased to be matching the formidable talents and technology
leadership of two industry leaders to serve an expanding base of engine,
truck and equipment customers worldwide," said Jim Owens, Caterpillar
Chairman and Chief Executive Officer. "As the world leader in construction
equipment and diesel engines, Caterpillar is now positioning itself for
growth in the on-highway truck market. This is an important step for
Caterpillar and we look forward to working with Navistar for the continued
benefit of our customers."
"This relationship is a perfect example of Navistar's strategy of growth
through leveraging our own assets and those that others have built," said
Daniel C. Ustian, Navistar Chairman, President and CEO. "In partnership with
Caterpillar we intend to extend our leading-edge product focus that we have
in North America into the rest of the world."
Through this alliance, Caterpillar plans to target a 2010 introduction of a
North American Cat-branded heavy-duty truck for severe service applications,
such as road construction, large infrastructure projects and oil and
petroleum development. Concurrent with this new strategic direction,
Caterpillar has determined independently that it will not supply EPA
2010-compliant engines to truck and other on-highway original equipment
manufacturers (OEMs).
"Caterpillar and our dealers will continue to provide product support and
service beyond 2010 for all Caterpillar on-highway engines regardless of
truck brand," said Douglas R. Oberhelman, Caterpillar Group President. "This
new truck—targeted for 2010—will incorporate the legendary quality of
Caterpillar's construction and mining machines and provide construction
customers a one-stop solution. In addition, with nearly 90% of our engine
business being off-highway, we'll continue to concentrate on our substantial
and growing opportunities to supply engines in the petroleum, marine,
electric power generation and industrial markets, as well as produce engines
for our own construction and mining equipment."
The companies have commissioned teams to focus on the truck and engine
opportunities. The initiatives contemplated by the MOU are subject to
completion of due diligence, execution of definitive agreements and
regulatory approvals.
