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deSanford · 08-31-2012, 03:26 PM

August 31, 2012

The U.S. Environmental Protection Agency (EPA) said Thursday (Aug. 30) that it will allow manufacturers to sell diesel engines that don’t meet federal emission standards.
As reported by the Chicago Tribune, the ruling will allow Navistar International Corp. to sell its non-compliant engines by paying a maximum fine of $3,800 each — double what it has been paying.
“We can now provide our dealers and customers with clarity and certainty as we transition to our clean engine technology and look forward to utilizing the Final Rule as needed,” Troy Clarke, Navistar president and chief operating officer, said in a statement.
The fines will not be retroactive, so Navistar will not have to pay extra for the non-compliant engines it has already sold.
The company’s heavy-duty engines are used in school buses, commercial trucks and other vehicles over 33,000 pounds. The company is also parent to RV manufacturer Navistar RV.
Navistar has non-compliant engines because technology it developed failed to meet 2010 emission standards to reduce smog-causing nitrogen oxide.
That technology cost it approximately $700 million since 2001. Navistar changed its course after reporting a second-quarter loss of $172 million. This month, the Lisle-based company said it would combine its technology with the approach used by its competitors to further lower emissions and get its engines certified. Navistar is also buying a competitor’s engines to meet the standards.
The EPA issued an interim rule in January that allowed manufacturers to sell non-compliant engines as long as they paid a fine of $1,919 per engine. Navistar competitors, including Mack Trucks Inc. and units of Daimler AG and Cummins Inc., successfully sued federal regulators, claiming that the agency was giving Navistar preferential treatment.
So, the EPA increased the fine Thursday.

Traps90 · 08-31-2012, 04:06 PM

Can't tell if that's good or bad news for Navistar, guess time will tell.

Wanabee FTer · 09-01-2012, 06:36 PM

Not looking good for Navistar.

According to Forbes, In the first half of fiscal 2012, Navistar’s pretax loss was $516 million on revenues of $6.4 billion. Navistar shares have been down more than 50% in the last 12 months, and only rose 3% on yesterdays news.

Quote:

the primary concern, says Gimme Credit analyst Vicki Bryan, is the rate at which Navistar is burning cash. She anticipates the company will use at least $1 billion in cash over the next 12 months as it regroups. The company recently borrowed $1 billion to help it through the transition but that might be enough to achieve stability. “Plummeting sales versus rising operating and R&D costs, plus unusual fines and charges including likely substantial impairment charges to write off inventory value, indicates Navistar may report losses much worse than currently expected over the next year,” she wrote in a note to investors.

Drifter · 09-01-2012, 07:09 PM

Traps90, I would hold up on that order for a few more mouths, you could possible save thousands.

Traps90 · 09-01-2012, 07:25 PM

Quote:

Originally Posted by Drifter

Traps90, I would hold up on that order for a few more mouths, you could possible save thousands.

Don't plan on ordering before the end of this year, cause we don't really want it until the end of April 2013.

So it will be interesting to see what all developes over the next quarter for Navistar. Although I think they will most likely pull through, but I have been known to guess wrong at times.

Wanabee FTer · 09-01-2012, 07:47 PM

IMO

Another candidate for a government bailout. (or not)

deSanford · 09-01-2012, 10:54 PM

It doesn't take a genus to recall all of the motor home manufacturers who are now no longer with us. They thought they would always be here and they are now GONE. It is no secret why ............ just look at the economy, and the lack of jobs along with the middle class being down sized in just about all categories. deSanford We really do need a change, and hope for the future.