Navistar moves to settle class action lawsuits, Troy Clarke sets sights on future

Navistar moves to settle class action lawsuits, Troy Clarke sets sights on future

U.S class action plaintiffs have filed a motion seeking preliminary judicial approval of a settlement agreement that, when effective, will be a major step in resolving EGR litigation related to International Model Year 2011-2104 Class 8 trucks sold with the Navistar's big bore engines.

Navistar-International-Truck-CEO-Troy-clarke-featured image
Troy Clarke, Navistar’s chairman, president and chief executive officer

Today, Navistar took a major step to resolve the legal accusations filed in 2014. U.S class action plaintiffs have filed a motion seeking preliminary judicial approval of a settlement agreement that, when effective, will be a major step in resolving EGR litigation related to Model Year 2011-2014 Class 8 trucks sold with the company’s big bore engines, the company stated. In anticipation of that settlement, Navistar is taking a $159 million charge, including $135 million to reflect the cost of the proposed settlement and an additional $24 million for certain other engine lawsuits that are not included in the settlement agreement.

This preliminary step toward the settlement of these class action lawsuits supports the company’s ongoing efforts to focus on Navistar’s current and future market opportunities.

While this is definitely the biggest headline-making move, it’s just one of many that Navistar has recently taken to position itself for future progress. Over the past six months, the company has repaid over $600 million of its outstanding debt, which included both of its convertible notes. The repayments were funded with cash on hand, another sign of the company’s improved financial profile.

Additionally, in December 2018, Cerberus Capital Management announced its purchase of a 70% interest in Navistar’s defense business, Navistar Defense LLC. This strategic milestone provided Navistar Defense with a well-established, long-term partner that is focused on making crucial growth investments in the business. It also sent a strong signal to the market that the company was focused on core truck and bus activities that remain at the heart of the company’s future.

Further strengthening the company’s position—and limitation of outside issues—in January 2019, the company ratified a new six-year collective bargaining agreement with the United Auto Workers. The contract sets a mutual agreement between the UAW and Navistar to implement team concepts at the company’s largest US manufacturing facility in Springfield, Ohio. The agreement not only sets a six-year path of prosperity for the plant workers, but includes critical agreements pertaining to quality, safety and cost.  

Navistar also announced the purchase of group annuity contracts that transfer to two Canadian insurers approximately $268 million of defined pension benefit plan obligations in Canada. The February 2019 transaction reflected Navistar’s goal to de-risk the balance sheet and manage future pension obligations while providing retirees with equivalent pension benefits.

So what does this all mean? What prompted the settlement decision? And what does this mean for the company which once again saw profitability the past two years after refreshing its entire product lineup?

I turned to Troy Clarke, Navistar’s chairman, president and chief executive officer, for the answers.

Fleet Equipment (FE): What went into the decision to settle the Class Action lawsuit?

Troy: Look, we’ve taken major steps to get beyond this issue in the marketplace. We’ve stood behind our customers and launched a great new product lineup. As a result, we’re growing market share. Our goal today is to focus on the opportunities that will keep building on that momentum. Resolving these class action lawsuits will help us sustain that focus.

FE: Coming off the heels of a profitable year, the settlement is definitely a good chunk of that profit—how does putting this behind you position Navistar going forward?

Troy: It positions us as a company that is focused on its customers and what they need to succeed. They’re looking for trucks that deliver reliability, durability, fuel efficiency and ease of operation, and we’ve checked that box. We’re also determined to provide them with industry-leading uptime. For example, our new partnership with Love’s Travel Stops makes our service network the industry’s largest and provides our customers with increased repair velocity.

FE: What feedback have you received from the Traton strategic alliance?

Troy: Traton, like Navistar, understands the value of a strong customer focus. The strategic alliance supports that focus and is delivering exactly what we’ve looked to it to provide. It is helping both companies with improved global scale and advanced technology at lower cost.

FE: What does this settlement mean to you personally, and what do you hope it shows the industry?

Troy: Personally, I see it as one of a number of steps we’ve taken to sharpen our focus on the future. We’re growing our core businesses, improving our balance sheet, and establishing a foundation for improved quality, efficiency and productivity. These steps demonstrate that we’re very, very serious about delivering quality and value and focusing on what customers need.

Moving forward

And, of course, there’s the elephant in the room: the prospect of Traton purchasing Navistar. The strategic alliance between the two companies continues to reap rewards for Navistar (its A26 International engine is just one example of many), and with Traton’s announcement that Volkswagen is a go for a summer IPO, Navistar’s latest strategic moves bode well for the OEM. Traton is on record saying it wants to be the “Undisputed Global Champion”—call it marketing, call it foreshadowing, but the fact is that they need a player in the North American market and Navistar has turned more than a few heads with its latest product lineup. You can be sure that Fleet Equipment will bring you the latest updates as we hear them.

If you’re hungry for even more, check out our exclusive interview with Troy from January and his take on the strength of Navistar’s Traton strategic alliance by clicking the links below.

You May Also Like

Hunter Engineering ROI calculators available to fleets

These ROI calculators are designed to help customers make informed decisions about the equipment they’re purchasing.


Hunter Engineering says its ROI calculators help end-users make informed decisions about investing in Hunter Engineering equipment. The company said in a press release that the ROI calculators cover a range of equipment, from wheel alignment systems to tire changers, balancers, and brake lathes. Each calculator is specifically tailored to the respected equipment being considered and provides a breakdown of the potential savings and benefits that can be achieved by investing in that equipment, the company says.

Peterbilt GM Jason Skoog charts today’s truck support, tomorrow’s truck solutions

Peterbilt made headlines recently when it became the first major North American OEM to open orders for an electric truck, the Peterbilt 220EV. In this exclusive interview, Peterbilt General Manager and PACCAR Vice President Jason Skoog details the technology investments that are keeping fleets productive during this year’s trying pandemic and laying the groundwork for

Peterbilt General Manager PACCAR Technology Electric Truck
An overview of the TPMS and ATIS offerings

There is a wide variety of tire inflation technology available, both in TPMS and ATIS form. Let’s take a quick look at some of the offerings.

New ways to help your trucks maintain the proper tire pressure

Let’s take a look at some of the new products that are helping trucking companies get the most ROI out of their tires.

Using the proper coolant is essential to protect engines

The solution is training. Anyone who may add coolant to a radiator needs to understand the type of coolant required by the vehicle and the danger of topping off with the wrong coolant.


Other Posts

Navistar launches International S13 Integrated Powertrain for vocational market

The S13 Integrated Powertrain, launched back in August of 2022, is now available for the vocational market.

Navistar recognizes exceptional technicians with inaugural award

Navistar announced their inaugural Technician of the Year award winners, Scott Killebrew and Tony Guzman.

Morgan Truck Body Unveils ‘NEO’ proof-of-concept body innovations

It comes off the heels of last year’s first-phase concept body that introduced lighter-weight materials and situational awareness elements, many of which are now available.

Isaac Connect smartphone app displayed at TCA’s Truckload 2023

When drivers are not in the truck cab or are off-duty, the Isaac app allows them to stay connected with their fleet via personal devices.