Navistar-Volkswagen deal: What can customers expect?
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On-, off-pavement romp with Mack’s latest powertrain tech
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Navistar, Volkswagen Announce ‘Wide Ranging Strategic Alliance’
Volkswagen Truck & Bus is taking a 16.6% equity stake in Navistar International Corp. as part of a “wide-ranging strategic alliance” that will initially focus on providing powertrains for Navistar trucks starting in 2019.
The joint venture is based on four pillars:
1. The equity investment. Volkswagen Truck & Bus will acquire 16.2 million newly issued shares in Navistar, representing 16.6% of post-transaction undiluted common stock (or 19.9% of pre-transaction outstanding common stock). It will pay $15.76 per share or a 25% premium over Navistar's 90-day volume weighted average price as of August 31, or 12% over Navistar's closing price on September 2. Navistar will receive $256 million from the equity investment to be used for general corporate purposes.
2. Technology sharing. The two companies will collaborate on technology for powertrain systems, as well as other advanced technologies. It will focus on powertrain technology solutions, with VW supplying engines and other powertrain components by 2019, according to Andreas Renschler, CEO of Volkswagen Truck & Bus. It also will explore collaboration in other areas, including advanced driver assistance systems, connected vehicle solutions, platooning and autonomous technologies, electric vehicles, and cab and chassis components. This collaboration will allow the companies to share some of the costs of future vehicle development.
3. A procurement joint venture. Pursuing joint global sourcing opportunities for parts for both companies will give both greater scale and competitiveness. It also can create improved pricing for end customers.
4. Governance. Navistar will add two Volkswagen Truck & Bus representatives to its board of directors, and a separate board will be formed to oversee the alliance.
When asked how the deal will affect Navistar's deal with Cummins, which is supplying some three-quarters of the engines going into International trucks, Troy Clarke, Navistar president and CEO, said, “We anticipate we will continue to offer Cummins products for ...Read the rest of this story
Will your next powertrain feature hybrid drive technology?
A couple of weeks ago, in the wake of the release of the final rule for the U.S. Environmental Protection Agency's Phase 2 Greenhouse Gas regulations, I told Fleet Owner readers the different ways I thought that ruling would affect powertrain development over the next decade.
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Right-sizing Your Fleet
When was the last time you sat down and evaluated whether or not you needed all the trucks you currently have in your fleet? Or if you have the right mix of trucks to efficiently complete all your deliveries?
If you are like most fleet owners, as long as the deliveries are being made, you probably assume that you have the right size fleet for your operation. However, it is very possible that you may have too many trucks in your fleet or the wrong mix of trucks and trailers.
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Trucking gains 3,400 jobs in August
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VW to Buy Stake in Navistar, Reports Say
Published reports on Monday indicate that Volkswagen's truck division will acquire a stake in Navistar International Corp. and sell engines to the American truck builder, according to Reuters, the Wall Street Journal and the Economic Times.
The deal, which could be announced by VW and Navistar on Tuesday, would give the German-based company a foothold in North America and could threaten Cummins' strong supplier relationship with Navistar, noted Stifel, a stock and industry analyst firm, in reacting to the reports on Monday.
Just how big a stake the company is buying was unclear. Reuters reported 19.9% while the Wal Street Journal said 17%.
Reuters said Volkswagen has agreed to supply engines to Navistar as part of the deal, quoting an unnamed source. Reuters also noted that Volkswagen declined to comment and Navistar couldn't be reached over the Labor Day holiday. Volkswagen will pay around $16 per Navistar share or about $223 million in total, the source told Reuters.
The WSJ says the two companies have been in on-again, off-again talks since early 2015. Sources told the Journal that they have agreed to cooperate on purchasing and developing new products.
Volkswagen reportedly would get two seats on the board of directors as part of the deal and would be joining a board that already includes representatives of activist investors Carl Icahn and Mark Rachesky, who each control about 20% of the company.
“VW has long been rumored to be interested in Navistar,” WSJ wrote. “The German company is a powerhouse in the global truck market, particularly in Europe and Brazil, but doesn't sell many [make that any] large commercial trucks in the U.S."
“Navistar draws most of its sales from the U.S., Canada and Mexico and has a limited overseas business, making it a potentially good fit for VW. Navistar also has a strong dealer network that ...Read the rest of this story