Navistar Avoids Bankruptcy through Recent Collaboration with Volkswagen

by San Antonio Attorney

Navistar was destined towards a fate of bankruptcy almost four years ago.

Navistar, a well renowned truck maker, recently wasted billions on a diesel engine.  Unfortunately, the project was disapproved by the Environmental Protection Agency.

Daniel Ustian, the former CEO of Navistar, was sharply criticized by Carl Icahn, one of Navistar’s major shareholders, as somebody crazy enough to invest on a failed multi-billion dollar project.

Based in Illinois, Navistar has not succumbed to bankruptcy and there is a sign of progress that the company has shifted to a more stable status.

The Volkswagen Truck & Bus company released a public statement that it will purchase a 16.6% ownership in Navistar.  At a meager price of $15.76 per share, Navistar will use the funds to manage their debt load.

The Volkswagen’s purchase of Navistar goes along with a mutual agreement that can bring change to the supply chain of Navistar.

The recent procurement will place Navistar into the buying network of the truck parts of Volkswagen.  Scania and Man are big brands that are included in the network.  This provides an opportunity for Volkswagen and Navistar to have an increased purchasing heave as fresh investments come in.  The new investments come in the form of vehicular technologies like automated driving, electric cars and chassis.

Navistar expects procurement that will generate a potential income of half billion for the next five years.  Another $200 million in annual cost saving by the year 2021 will be gained afterwards.

Troy Clarke, the new CEO of Navistar, stated through a press release that this recent collaboration will benefit purchasing operations through an international scale.  It is aimed to expand technology options through the leverage of the best aspects of both companies and enhancing Navistar to its optimum level.

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