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.

5 QUICK BUSINESS READS

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

Recalls: Children’s clothing, fitness products and more
Recalls: Children’s clothing, fitness products and more

Parents, fitness buffs and those prone to bug bites should check to see if they have the potentially dangerous products being recalled this week. Infant and toddler coveralls sold under the name ED by Ellen DeGeneres are under recall because the bunny applique can come off and pose a choking hazard for your child, according to the Consumer Product...
Ohio thieves target these vehicles more than any other
Ohio thieves target these vehicles more than any other

The National Insurance Crime Bureau has released its annual “Hot Wheels” report, identifying the 10 most stolen vehicles in the United States — and in Ohio. The report examines vehicle theft data submitted by law enforcement to the National Crime Information Center and determines the vehicle make, model and model year most reported...
The stage is set: UD ready for first gubernatorial debate tonight
The stage is set: UD ready for first gubernatorial debate tonight

After years of discussions and weeks of work, now it comes down to just a few hours: The University of Dayton will host the first 2018 Ohio gubernatorial debate tonight at Daniel J. Curran Place. Eric Spina, UD president, sounded a confident note this morning, saying the university community is ready. “For many years, we have been letting folks...
Health care a top ballot box concern for older Ohioans
Health care a top ballot box concern for older Ohioans

The majority of Ohioans over the age of 50 say concerns about health care will affect their vote this fall. About 81 percent said health care is a “very important” issue when it comes to their vote for Congressional candidates this fall. About 80 percent said Social Security is a very important issue and 76 percent said Medicare is, according...
760-mph hyperloop from Ohio to Chicago moves closer with new regulations
760-mph hyperloop from Ohio to Chicago moves closer with new regulations

An exceptionally fast transportation system may be a step closer to Ohio. Hyperloop Transportation Technologies (HyperloopTT) and German insurance company Munich Re said Monday that a set of core safety requirements and certification guidelines for the fledgling mode of transportation have been created. The hyperloop is expected to transport pods of...
More Stories