Navistar officials and analysts have said the deal provided benefits for both sides. For Navistar, it meant more financial stability as the company continued on a strategy to regain market share and become more competitive after financial struggles earlier this decade. For Volkswagen, its Truck and Bus Division gained access to the North American market, where it previously wasn’t represented.
2. What’s happening now
Volkswagen executives made headlines on Monday when they said the company would consider a takeover of Navistar.
Matthias Gruendler, chief financial officer for VW’s truck and bus division, said the company might consider boosting its stake in Navistar from 16.9 percent during a press conference in Munich, according to information from Bloomberg. However, Bloomberg also reported he did not speculate on a potential timeframe for how soon any deal might take place.
Officials at Navistar have declined to comment on a possible deal.
3. This was not a surprise
The News-Sun reported that an eventual takeover was possible when the agreement was first announced in 2016.
“We’ve certainly said from the outset that we thought over time there would be a closer and closer relationship,” Stephen Volkmann, an analyst for Jefferies, told the News-Sun this week. “Volkswagen is trying to build a global truck franchise and Navistar doesn’t really have enough global scale to compete with the big guys so it makes a lot of sense.”
4. The impact on Springfield isn’t clear
Navistar is a significant employer in Clark County, with around 1,800 workers at its Springfield plant. Thousands of retirees also live in the area.
Officials from the Chamber of Greater Springfield declined to speculate on what the deal might mean locally, but Volkmann said Volkswagen will likely want to keep Navistar’s current U.S. manufacturing operations strong as it tries to become a player in the competitive U.S. truck market.
Officials from the UAW Local 402, which represents most of the facility’s workers in Springfield, said it’s too early to speculate. But they said the UAW negotiated a clause into its current Collective Bargaining Agreement to prepare for this kind of situation.
5. The companies have already collaborated on some products
Navistar has recently unveiled some products that highlighted the collaboration between the two companies. In November last year, Navistar unveiled an electric school bus called the chargE that is expected to begin production at Navistar’s Tulsa plant next year.
The companies have also announced plans to develop an electric medium-duty truck that could be launched for customers in the U.S. and Canada late next year or in early 2020.
READ MORE: Navistar, big Springfield employer, to make electric school bus