Cat, Navistar Launching New Truck Lines

Caterpillar Inc. and Navistar International Corp. will produce heavy-duty vocational trucks for sale in North America, and will form a 50/50 joint venture to “pursue global commercial truck opportunities” elsewhere in the world. The agreement is a further development of the alliance initiated by the two groups last summer. The new Caterpillar-brand vocational trucks will be co-developed by Caterpillar and Navistar, and manufactured in Navistar's Garland, TX, plant. The trucks will be sold and serviced through the Caterpillar North American dealer network. The trucks will feature proprietary Caterpillar components and technology, for activities like earth moving, quarrying, waste handling, mining, general and heavy construction, logging, and road construction. "The heavy-duty vocational trucks will be purpose-built to complement Caterpillar's existing product line and will give Caterpillar dealers an unmatched ability to support customer needs from extraction through delivery," explained George Taylor, director and general manager of the Caterpillar Global On-Highway Department. The new trucks will go into full production in early 2011. The 50/50 joint venture to develop, manufacture, and distribute commercial trucks outside of North America and India will focus initially on Australia, Brazil, China, Russia, South Africa, and Turkey. The prospective product line will feature both aero nose and cab-over designs, to be sold under both the Caterpillar and International brands. The first products are expected as early as the third quarter of this year. "We believe this clearly is an opportunity where the whole is greater than the sum of the parts," said Dee Kapur, president Navistar Truck Group. "While Cat and Navistar do not compete in our core businesses, each brings distinctive capabilities to the table and have common goals to expand the base of engine, truck and equipment customers worldwide." "This joint venture leverages the complementary strengths of two great companies to serve global markets," stated Daniel C. Ustian, chairman, president, and CEO, Navistar. "The venture will be distinctively positioned to offer customers world class on-highway trucks through the unequaled sales and service network of Cat and International dealers around the world, and the deep product expertise of Navistar." The new Caterpillar on-highway vocational trucks will be unveiled in late 2010 and will go into full production in early 2011. The trucks will be sold and serviced exclusively by Caterpillar Dealers in North America. The transaction is subject to various closing conditions, including the execution of the related strategic alliance agreement and certain other ancillary agreements.