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Redesigned Navistar Diesel Gets OK from EPA

Lisle, Ill.-based-based Navistar International Corp. said Tuesday (April 16) that it received federal approval for its big-bore diesel engines, according to a report by the Chicago Tribune.

“We’ve reached another milestone in our emissions strategy transition and are on track to deliver our first ProStar units with our SCR-based 13-liter engines at the end of April,” Jack Allen, Navistar executive vice president and COO, said in a statement.

Navistar spent more than $700 million over a decade designing a engine technology that failed to comply with 2010 federal emission standards. To sell the engines after the 2010 deadline, the company used emission credits and paid fines.

Last year, shortly after the U.S. Environmental Protection Agency (EPA) nearly doubled the fines to about $4,000 per engine, Navistar decided to build an engine that combines its technology with that of competitor Cummins Inc. Under the deal with Cummins, Navistar also will outfit its trucks with 15-liter engines.

The partnership is part of the company’s plan to return to profitability by the end of the year. The plan also includes layoffs, selling business units and closing manufacturing plants.

“If I look back, it’s been a nearly three year journey to get certification,” said Basili Alukos, an analyst with Chicago-based Morningstar. “It’s a huge relief.”

Alukos said that while the company can focus on recouping market share, the slow pace of the economy is a concern for Navistar and other manufacturers. Navistar’s market share of heavy duty trucks was about 11% in the first quarter, down from estimates of 21 percent in 2011.

Navistar operates 18 plants in North America:  11 make and assemble trucks, buses and chassis; six build engines; and one makes rail cars.  Navistar also builds recreational vehicles through its Navistar RV subsidiary.

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