DOW JONES NEWSWIRES
Caterpillar Inc. (CAT) and Navistar International Corp. (NAV)
have signed a definitive agreement to build Caterpillar-brand
construction trucks for North America and to form a 50-50 joint
venture to make commercial trucks and engines for overseas
markets.
The heavy-equipment maker had said it planned to quit making
engines for the U.S. truck market in 2010 to avoid the cost of
complying with new domestic emissions standards.
The companies formed an alliance in June but had not previously
released details about their plans.
Under the alliance, Caterpillar and Navistar will produce a new
line of heavy-duty Caterpillar vocational trucks for North America
only. The trucks will be co-developed by both companies and
manufactured in the truck maker's plant in Garland, Texas.
They will feature key Caterpillar proprietary components and
technology and will target customers in a variety of occupations,
including earth moving, quarry, waste, mining, general and heavy
construction, logging and road construction.
The trucks will be unveiled in late 2010 and will go into full
production in early 2011. They will be sold and serviced
exclusively by Caterpillar Dealers in North America.
The joint venture initially will focus on Australia, Brazil,
China, Russia, South Africa and Turkey, where it plans to sell aero
nose and cab-over designs under both the Caterpillar and
International brands. The first products are expected to be
available as early as the third quarter.
Caterpillar's shares were at $31.35, up 0.1%, in after-hours
trading while Navistar's rose 0.2% to $32.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com