Navistar International Corp. has been ousted from competition for a $14 billion military contract that could have helped the company regain some credibility after a series of engine compliance issues have put it at risk for bankruptcy or management change.

Navistar — which employs more than 850 people at a local production plant — was one of six companies the Pentagon had been considering to replace 55,000 of the Humvees used by the Army and Marine Corp. AM General, Lockheed Martin and Oshkosh were selected to compete to determine whose prototype design will be used.

“We just assumed and we thought they had a good competitive proposal,” said former U.S. Rep. David Hobson, who now lobbies for Navistar in Washington. “We’re trying to find out what’s going on.”

Navistar has a large presence in the defense industry with more than 25 different military vehicle models and engine models.

In an e-mail, Navistar spokesman Steve Schrier said the Springfield plant has done some cab manufacturing for military projects in the past. But this contract would not have been done in Springfield.

“Ideally we’d have liked to see them win and have the production at a plant, which would’ve had a ripple effect even if it wasn’t in Springfield,” said Jason Barlow, president of United Auto Workers Local 402, which represents about 850 local Navistar employees.

He said he had anticipated that with winning the contract, more production of some kind would come Springfield’s way.

Although the money associated with the contract wouldn’t be in effect until 2015, the contract could have helped the company out of its current situation. The manufacturer has reported two quarters of large revenue losses — mostly due to its failed engine technology that never reached 2010 carbon emissions standards. Navistar has abandoned the costly investment and is now working on a hybrid of its own technology and that of its competitors to become compliant in 2013.

Navistar plans on meeting with government officials about its proposed vehicle, the Saratoga JLTV, and explore if it could still manufacture the winning vehicle or parts for it, said Archie Massicotte, president of Navistar defense in a statement.

“Down the road, there may be an opportunity for Navistar to bid for a JLTV production contract after the (engineering and manufacturing development) phase is complete,” Massicotte said. “We will seriously consider that option.”

Officials from the U.S. Department of Defense were unavailable for comment on Friday.

Industry analysts say this loss is a sign of a crumbling facade.

“The loss of this contract opportunity is yet another huge blow for Navistar’s credibility; coming at a time of its greatest financial distress,” said Vicki Bryan, Gimme Credit analyst in her latest report on the truck manufacturer. “Recall that Navistar recently abandoned its failed flagship EGR emissions technology, as we projected, and therefore has effectively gutted virtually its entire current product offering and put the company at risk of bankruptcy.”

Stockholders may share her view — shares fell 7 percent on Thursday and .65 percent Friday, a total of a 50 percent drop over the year.

Wire reports contributed to this story.