Caterpillar Inc. and Navistar International Corporation have signed an agreement to produce Caterpillar heavy-duty on-road trucks for sale in the North American market and form a 50/50 joint venture to pursue global commercial truck opportunities outside North America, as the next step in the alliance announced in June 2008.
"This joint venture combines two strong companies with complementary strengths to serve the global market," said Daniel C. Ustian, chairman, president and chief executive officer of Navistar. "It is uniquely positioned to provide world-class on-highway trucks to customers through Caterpillar's and Navistar's unparalleled global sales and service network and Navistar's deep product expertise."
"We're pleased with the efforts of all the teams involved in making this signing a reality," said Jim Owens, Caterpillar chairman and chief executive officer. "This is an important milestone as Caterpillar looks to become a significant player in the global on-highway truck market. Additionally, the introduction of the Cat on-highway truck line represents an exciting opportunity for Caterpillar and its dealers to bring a complete site-based solution to our customers."
Global Commercial Truck Market (Excluding North America)
The 50/50 joint venture will develop, manufacture and sell commercial trucks outside North America and India. Markets for the products will be evaluated one at a time, with initial emphasis on Australia, Brazil, China, Russia, South Africa and Turkey. The product lineup is expected to include both aerodynamic and cab-over-engine trucks sold under both the Caterpillar and International brands. Initial products are expected to be available beginning late in the third quarter of 2009.
"We believe this is a 1+1=3 opportunity," said Dee Kapur, president of Navistar's Truck Group. "Both companies bring their respective strengths to the table and work toward a common goal - expanding the customer base for engines, trucks and equipment globally when Caterpillar and Navistar no longer compete in core businesses."
The transaction is subject to regulatory approvals and other closing conditions, including the execution of definitive joint venture operating agreements and ancillary agreements.
Upon formation of the joint venture, leadership and board positions will be equally populated by representatives from Caterpillar and Navistar.
Caterpillar On-Highway Trucks for North America Under Strategic Alliance
During the strategic alliance, Caterpillar and Navistar will develop and manufacture a new line of heavy-duty Caterpillar on-highway vocational trucks exclusively for the North American market. The new Caterpillar trucks will be co-developed by Caterpillar and Navistar and manufactured at Navistar's Garland, Texas, facility. They will be sold and serviced through Caterpillar's North American dealer network.
"The addition of the heavy-duty on-highway vocational truck line complements existing Caterpillar product lines and meets customer needs from mining to highway-haul," said George Taylor, Caterpillar global on-highway truck general manager.
Caterpillar trucks will feature Caterpillar proprietary components and technology and target customers who operate specialty trucks such as haulers, quarry, refuse, mining, general and heavy construction, logging and road-building applications.
"Working with an industry leader in innovation gives Caterpillar confidence that we can offer a unique offering of Caterpillar on-highway vocational trucks to customers in North America," added Taylor.
The new Caterpillar on-highway vocational truck line will be introduced during the second half of 2010 and reach full production early in 2011. The trucks will be exclusively sold and serviced through Caterpillar dealers in North America. This transaction is also subject to customary closing conditions, including the execution of definitive strategic alliance agreements and ancillary agreements.
Background
About Caterpillar
For more than 80 years, Caterpillar Inc. has been making sustainable progress possible and driving positive change on every continent. With 2008 sales and revenue of $51.32 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company is also a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services.
About Navistar
Navistar traces its history back to 1831 and its predecessor companies, McCormick and International Harvester. Today, Navistar is a holding company whose subsidiaries and affiliates produce International® brand commercial trucks, military trucks and school and commercial buses; MaxxForce® brand diesel engines in the 2.5~15 liter range; IC® brand school and commercial buses; Workhorse® brand cutaway and conventional van chassis used in motor homes and delivery vans; and diesel engines for the pickup truck, van and sport utility vehicle markets. Navistar offers service parts for trucks and diesel engines and has a wholly owned finance subsidiary providing financial services.