Navistar, Volkswagen Announce 'Wide Ranging Strategic Alliance'
- by Enrique Stewart
- in Technology
- — Sep 8, 2016
The two companies are starting joint work now on new global engine programs, and some VW engine components will start appearing in Navistar's USA products in 2019.
The deal will cost VW $256 million (229 million euros) - $15.76 per share - and is scheduled to be completed by late 2016 or early 2017.
Therefore, analysts with Germany-based DZ Bank said in comments that the deal may be "a first step for VW to improve its footprint in the United States", but that the company's commercial vehicles business was "far less important than its auto business". Technology sharing with an emphasis on powertrain technology is also part of the deal. The parent company of Mercedes-Benz has quietly amassed 40% of heavy duty truck sales in North America in recent years.
For its purchase of 16.2 million Navistar shares, Volkswagen Truck & Bus will be able to name two directors to the Navistar board of directors.
By year five it expects the alliance to generate synergies worth at least $200 million a year for Navistar, which could rise further as the companies continue to introduce technologies from the collaboration.
With the strategic technology and supply cooperation, Volkswagen Truck & Bus will become one of Navistar's most important technology partners.
Navistar said synergies will come from collaboration on procurement and technology, rather than job cuts.
Unifor picks GM as negotiating target
Dias has said the union will use its strike mandate if talks don't lead to new product plans for Oshawa. Production of all four models is set to wind down or be moved elsewhere over the next several years.
Icahn said in a regulatory filing Tuesday that Navistar agreed the company won't support any person who seeks to increase the size of the board to more than 12 directors, as long as an Icahn nominee is a member of the board.
The company's chief executive Troy Clarke said: "Over the longer term, it is meant to expand the technology options we are able to offer our customers by leveraging the best of both companies".
"On our way to becoming a global champion all options are open", he said.
Volkswagen's MAN unit took a restructuring charge of more than EUR200 million past year as part of Mr. Renschler's push to boost earnings and savings by more closely integrating the German truck maker with VW's Swedish manufacturer Scania.
Navistar has also had its own emissions issues.
The deal, details of which were first reported on Monday by The Wall Street Journal, comes as Navistar deals with the fallout from a run-in over emissions regulations and a declining market share that has left it trailing rivals in a North American commercial truck market wrestling with a slump. That includes driver assistance systems, connected vehicle solutions, platooning and autonomous technologies, electric vehicles, and cab and chassis components. "Now Navistar joins us at the right time so we can develop them together and start to see real economies of scale".
"If your concern was that Navistar was not a company that can do that, that concern should go away", he said.
