Caterpillar Inc. and Navistar International Corp. agreed to jointly produce a new line of heavy-duty Caterpillar trucks made to order for customers in fields from earth moving to mining and road-building.
The so-called vocational trucks will be "purpose-built to complement Caterpillar's existing product line," George Taylor, general manager of the company's on-highway department, said in a statement. They will be built at Navistar's plant in Garland, Texas, and sold through Caterpillar's North American dealers.
The 50-50 joint venture will also develop and assemble commercial trucks outside of North America and India, initially targeting markets such as Australia, Brazil, China, Russia, South Africa and Turkey, a Caterpillar spokeswoman, Kate Kenny, said in a telephone interview.
The accord brings together Caterpillar, the world's largest maker of bulldozers and earth-moving equipment, with Navistar, the world's fourth-largest truckmaker, as the recession damps demand for construction and other heavy-duty vehicles.
"We believe this clearly is an opportunity where the whole is greater than the sum of the parts," Dee Kapur, president of the Navistar Truck Group, said in the statement.
The companies said the new vocational trucks will be unveiled in late 2010 and move into full production in early 2011. Commercial trucks built under the joint venture will be sold under both the Caterpillar and International brands as early as the third quarter.
The transaction is subject to various regulatory approvals and other closing conditions, the companies said.
Caterpillar, based in Peoria, fell 84 cents, or 2.6 percent, to $31.31 at 6:40 p.m. after the close of regular trading on the New York Stock Exchange. The company has said it may post a first-quarter loss, its first in 16 years.
Navistar gained $1.18, or 3.8 percent, to $31.93. The shares of the Warrenville-based company have risen 49 percent this year. Navistar was the largest supplier of blast- resistant vehicles to the U.S. military under a $22.4 billion program to equip troops in Iraq.
http://www.dailyherald.com/story/?id=284597
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