Cat And Navistar To Focus On Global Truck Business And Cooperate On Engine Technologies

PEORIA, Ill., June 12 /PRNewswire-FirstCall/ -- Caterpillar Inc.(NYSE: CAT) and Navistar International Corporation (Pink Sheets: NAVZ) havesigned a Memorandum of Understanding (MOU) to pursue global on-highway truckbusiness opportunities and cooperate on a variety of engine platforms. Thetwo companies intend to focus on global truck opportunities, including NorthAmerican severe service construction trucks, as well as technology developmentfor engines worldwide.

'We are pleased to be matching the formidable talents and technologyleadership of two industry leaders to serve an expanding base of engine, truckand equipment customers worldwide,' said Jim Owens, Caterpillar Chairman andChief Executive Officer. 'As the world leader in construction equipment anddiesel engines, Caterpillar is now positioning itself for growth in theon-highway truck market. This is an important step for Caterpillar and welook forward to working with Navistar for the continued benefit of ourcustomers.'

'This relationship is a perfect example of Navistar's strategy of growththrough leveraging our own assets and those that others have built,' saidDaniel C. Ustian, Navistar Chairman, President and CEO. 'In partnership withCaterpillar we intend to extend our leading-edge product focus that we have inNorth America into the rest of the world.'

Through this alliance, Caterpillar plans to target a 2010 introduction ofa North American Cat branded heavy-duty truck for severe service applications,such as road construction, large infrastructure projects and oil and petroleumdevelopment. Concurrent with this new strategic direction, Caterpillar hasdetermined independently that it will not supply EPA 2010 compliant engines totruck and other on-highway original equipment manufacturers (OEMs).

'Caterpillar and our dealers will continue to provide product support andservice beyond 2010 for all Caterpillar on-highway engines regardless of truckbrand,' said Douglas R. Oberhelman, Caterpillar Group President. 'This newtruck -- targeted for 2010 -- will incorporate the legendary quality ofCaterpillar's construction and mining machines and provide constructioncustomers a one-stop solution. In addition, with nearly 90 percent of ourengine business being off-highway, we'll continue to concentrate on oursubstantial and growing opportunities to supply engines in the petroleum,marine, electric power generation and industrial markets -- as well as produceengines for our own construction and mining equipment.'

The companies have commissioned teams to focus on the truck and engineopportunities. The initiatives contemplated by the MOU are subject tocompletion of due diligence, execution of definitive agreements and regulatoryapprovals.

Global Truck Collaboration

The companies intend to work together to develop, manufacture anddistribute commercial trucks in select regions outside of North America. Theproduct offering would include a full line of medium and heavy-duty trucks inboth conventional and cab over designs.

'The combination of Navistar's truck design, development and manufacturingexpertise and Caterpillar's unparalleled worldwide distribution creates asignificant advantage for global customers through the ability to offer theright vehicle for the right application through more than 4,700 points ofdistribution around the world,' said Dee Kapur, President, Navistar TruckGroup.