In a long-anticipated announcement, Caterpillar Inc. and Navistar International Corp. revealed that they have signed a memorandum of understanding 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.
In a related move, Caterpillar said it had determined independently that it will not supply EPA 2010 compliant engines to truck and other on-highway original equipment manufacturers. Instead, Caterpillar will work through its alliance with Navistar 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.
“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.”
Caterpillar reassured its existing on-highway customers that they could count on the company. “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.
Oberhelman said the new severe service truck would give Caterpillar’s construction and mining customers a “a one-stop solution” for its equipment needs. “In addition, with nearly 90 percent 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.”
Caterpillar and Navistar have formed teams to explore their truck and engine opportunities. The alliance contemplated by the MOU is subject to completion of due diligence, execution of definitive agreements and regulatory approvals.
