Judge Rules SEC Suit Against Former Navistar Exec Can Proceed

The federal government's securities fraud suit against Daniel C. Ustian, former chairman and CEO of Navistar International, can proceed in spite of objections raised by Ustian's attorneys, a federal judge has ruled.

Ustian had promoted a unique diesel exhaust emissions solution. But the Securities and Exchange Commission has charged in its suit that he knew it couldn't work, with subsequent losses to company investors.

Federal Judge Sara Ellis, of the Northern District of Illinios, made the ruling earlier this week, reported the Springfield (Ohio) News-Sun.

“Because the SEC sufficiently alleges that Ustian's statements were misleading and material to the investing public and that Ustian knew this, the SEC sufficiently states a claim for securities fraud,” wrote Judge Ellis. “The SEC also sufficiently alleges that Navistar violated the securities laws and that Ustian is liable for Navistar's violations.”

Navistar's Advanced EGR diesels couldn't meet EPA exhaust limits, but Chairman and CEO Dan Ustian promoted the products anyway, the SEC has charged. Photo: Tom Berg

From late 2009 and for several years after, Ustian said an approach called Advanced-EGR (exhaust-gas recirculation) would meet federal Environmental Protection Agency standards. But the SEC says continued testing by Navistar engineers showed it wouldn't work. Meanwhile, Ustian led a marketing assault on competitors who used selective catalytic reduction, the exhaust aftertreatment requiring urea (diesel exhaust fluid) injection, as inconvenient and expensive.

Navistar investors revolted when serious problems with A-EGR became known, customers complained, sales sagged, expensive warranty claims caused losses for the company, and stock value fell. Ustian was dismissed in August 2012, and last year Navistar paid a $7.5-million fine to the government for violating emissions rules.

Judge Ellis further wrote that: “The United States Securities and Exchange Commission alleges that Defendant Daniel C. Ustian, Navistar's former CEO and president, was so driven by a desire to produce an ...Read the rest of this story

Stemco Builds R&D Lab to Design and Test Air Springs

Photo: Stemco

Stemco has completed construction of a research and development lab built to design and test advances in materials, designs, and technology for commercial vehicle air springs.

The 20,000-square-foot facility was built in response to Stemco's acquisition of the air springs business of the former Veyance Technologies, now part of Continental AG, which produced Goodyear Air Spring products. The new facility was built in Fairlawn, Ohio.

Purchase of the site was first approved in Oct. 2015 and groundbreaking took place in Nov. 2015. The full build schedule took eight months to complete, which included moving, installation, and recalibration of all the test equipment. Stemco engaged with Geis Companies, an Ohio-based design/build company, for all aspects of the construction process.

“Following the purchase of the Goodyear Air Springs business, we were intent on keeping the business in Fairlawn, retaining the workforce and investing where necessary to support our long-term growth,” said David Brinkman, segment business leader, air springs for Stemco. “The new facility features state-of-the-art test equipment for a talented group of engineers that will serve our production facilities and our customers well in the future.”

Related: Stemco Agrees to Buy Veyance Air Springs

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Trucking Activity Looks Strong to Start 2017

Photo: Cargo Transporters

LAS VEGAS. “Truckable Economic Activity,” that chunk of the Gross Domestic Product that spends time in trucks, looks to be getting off to a strong start in 2017, according to Robert Dieli, president of RDLB, Inc., a Chicago-based economic research and management consulting firm.

Speaking at the Heavy Duty Aftermarket Dialogue event here, Dieli said he expects the expansion phase of the business cycle to continue through 2017. “Domestic events, mainly those surrounding fiscal policy are expected to have the most effect on TEA over the course of 2017 and 2018.”

The main components of TEA are consumption, investment, exports, imports and government. Dieli said the composition of TEA growth will continue to change. “We expect improvements in Truckable Fixed Investment and Truckable Exports. The adjustment to structural transformation will continue; of special concern is the implementation of electronic logging device regulations.”

Currently, 45% of TEA is consumption, 24% investment, 14% exports, 10% imports (imports are counted as a plus in TEA because they spend time on trucks) and government 7%.

Dieli said we are still in the expansion phase of the business cycle, but at some point there will be a boom and “we will begin to see economic instability.”

He uses something called the Enhanced Aggregate Spread, which is a nine-month forward forecasting model. “It is saying we should have expansion continue through the third quarter of 2017.”

Dieli spent some time during his presentation talking about how hiring patterns are a reliable indicator of trucking activity. General freight accounts for 69% of trucking hires while specialized freight (reefers, tanks, flat beds, moving companies, etc.) account for the other 31%. “Early in 2016 we saw a decline in trucking employment,” he said, “but that reversed itself and we have had strong increases in trucking employment since.” ...Read the rest of this story

Covenant Transportation Group Announces Fourth Quarter Financial and Operating Results

Knight Transportation Reports Fourth Quarter and Annual 2016 Revenue and Earnings