Navistar closes deal for VW to buy 17 percent stake in truckmaker

Navistar has completed its strategic alliance with Volkswagen Truck and Bus, a deal that’s expected to bolster the truckmaker’s finances and lead to extensive collaboration between the manufacturers.

The deal calls for Volkswagen to buy a roughly 17-percent equity stake in Navistar and invest about $256 million in the Illinois-based truckmaker. Volkswagen will also have the right to appoint two members to the truckmaker’s board and the deal also provides the German company with a strategic foothold in the U.S. truck market.

RELATED: Navistar stock jumps nearly 400 percent, VW deal cited as key

Navistar is a major Springfield employer with about 1,500 current workers and thousands of retirees in the area. The company has also worked to boost hiring in preparation for two joint agreements with GM.

The closing of the deal follows all necessary regulatory approvals, finalization of agreements relating to the procurement joint venture and the technology and supply collaboration, and satisfaction of other closing conditions, Navistar leaders said in a statement.

“This alliance with Volkswagen Truck and Bus marks a significant milestone in our company’s history, and we expect it will create multiple benefits for both companies in both the near and long term,” said Troy Clarke, Navistar’s chairman, president and CEO in a statement. “Now that the transaction has closed, we will move quickly to collaborate with an industry-leading, strategic partner to increase our global scale, strengthen our competitiveness, and provide our customers with expanded access to cutting-edge products, technology and services.”

DETAILS:Navistar to add 300 jobs in Springfield with second GM deal

Navistar officials have previously said the agreement likely won’t have an immediate impact on its Springfield manufacturing plant. However, it could potentially mean more products produced in Clark County in the future.

Even if the deal doesn’t provide immediate benefits in Springfield, it still provides more stability for the company’s facilities in Springfield long-term, said Horton Hobbs, vice president for economic development at the Chamber of Greater Springfield.

“It’s a significant announcement,” Hobbs said. “It may not make an impact today but long-term, it certainly sets our community up for growth. That’s really what we’ve wanted for a long time.”

For the truckmaker, the agreement means more financial flexibility. For Volkswagen, its Truck and Bus Division will gain access to the North American market, where it previously wasn’t represented. The company’s brands include MAN and Scania.

READ MORE: Case alleging former Navistar CEO misled investors moves forward

The companies will also work together to develop new technologies and establish a joint procurement venture for purchasing. Initially, the deal will focus on common power-train systems, but will also allow more collaboration for future commercial vehicle development.

The Springfield plant also is gearing up to begin production of a cutaway model of GM’s G Van beginning this year. Navistar and GM also made a joint agreement in 2015 to build medium-duty trucks in Springfield.

Those deals provided security, along will millions in new investments in a plant that as recently as 2010 had as few as 300 workers. Local leaders have credited better relations between the UAW Local 402 and the company’s management for making those deals possible.

“It’s a very positive sign for not only the company but the community and we’re excited to hear this (VW) announcement,” Hobbs said.


Navistar-VW deal: 5 little-known facts about Navistar

Honda supplier to move to Springfield, build $10M new plant

Bellefontaine brewery named best beer bar in Ohio

$104K grant will repair 24 homes in Clark County

Upper Valley Mall movie theater closes after decades

Reader Comments ...

Next Up in Business

Springfield pizza box maker to start $1M expansion
Springfield pizza box maker to start $1M expansion

A Springfield packaging firm that supplies pizza boxes for several of the region’s most popular restaurants will begin a roughly $1 million expansion next month. New Method Packaging started in Springfield in 1982 after Neil Miller lost a job and started producing disposable pizza circles from his home. The company eventually began producing...
Could Lidl still come to Beavercreek? Grocer explains US expansion plans
Could Lidl still come to Beavercreek? Grocer explains US expansion plans

German grocer Lidl is slowing its an ambitious expansion in the United States, putting a hold in plans to open any stores in Ohio right now. In mid-2017, the grocery chain was “actively looking at sites” in Ohio and submitted an application to build a store in Beavercreek. The grocery store chain, which first opened stores in the U.S. last...
Tariffs boost steel workers, Springfield companies worry about costs
Tariffs boost steel workers, Springfield companies worry about costs

Tariffs set to go into effect today on steel and aluminum have drawn praise from the head of one of the nation’s union organizations and Ohio’s Democratic senator but some Springfield manufacturers warned of unintended consequences and higher costs for customers. Proponents of the tariffs argued they are necessary to protect American steel...
Toys ‘R’ Us founder Charles Lazarus, 94, dies
Toys ‘R’ Us founder Charles Lazarus, 94, dies

Charles Lazarus, who founded Toys ‘R’ Us, has died. The retailer confirmed that Lazarus, 94, died Thursday morning. He no longer had any ownership position in the chain, but he started the company when he was 24 years old in 1948. He served as CEO until 1994. “There have been many sad moments for Toys”R”Us in recent weeks...
Become a rent-a-friend? 6 under-the-radar ways to make some extra cash
Become a rent-a-friend? 6 under-the-radar ways to make some extra cash

Need some extra cash or an ongoing side hustle? It can pay (literally) to get a little creative. In fact, in today's inventive economy, it can pay even more if you go beyond "creative" and into the realm of pretty weird. Still, as long as they're legal (and the following suggestions are), what does it hurt to bring home the bucks in an odd...
More Stories