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Navistar Board Approves Investment in Next Generation Truck

15 October 1997

Navistar Board Approves Investment in Next Generation Truck

   Next Generation Trucks Strengthen Competitiveness Well Into Next Century

    CHICAGO,  Oct. 15 --The Board of Directors of Navistar
International Corporation yesterday approved funding for the
company's next generation truck (NGT), including capital spending, and
investment in product and process development.  The funding provides for
creation of new medium and heavy trucks and school bus chassis, and
significant improvements in assembly operations.
    "This investment will make Navistar competitive well into the next
century," said John R. Horne, chairman, president and chief executive officer.
"More than that, these initiatives will deliver solid financial returns to
shareowners, as they will help our truck business meet our minimum criteria of
15-percent return on assets.
    "This action represents another significant step in implementing our five
point truck strategy, which includes new product development, reducing product
complexity, focusing our plants, expansion to serve Mexico and Latin America,
and achieving competitive wages, benefits and productivity levels."
    The investment includes approximately $350 million in capital spending and
$300 million in development expense.  Outlays will be made over the next six
years, and include the following elements:

    *  Development of a full line of medium trucks and chassis, school bus
       chassis, and regular conventional heavy trucks and chassis.
    *  New state-of-the art process controls and material management programs
       to improve production efficiencies in the truck business.
    *  Tooling and equipment for a next generation of medium trucks to be
       built at the company's Springfield, Ohio manufacturing facility.
    *  Transformation of the Springfield plant into a low cost, world-class
       medium truck manufacturing facility.  The plant will include a state of
       the art stamping and cab assembly operation.

    Implementation of the development and design phase of NGT will begin
immediately.  Product introductions will begin mid 2001 and continue
approximately every six months through 2003.
    The product development plans and aggressive transformation of the
Springfield Assembly plant reflects the new, close working relationship
between Navistar and the UAW that resulted in a new labor agreement reached
August 19, 1997.
    The agreement provides for increased flexibility in job design and use of
modular construction techniques.  The landmark agreement was key to Navistar's
efforts to build the new trucks and buses and improve the company's overall
competitiveness.
    The scope of this program is broader than that announced in June 1996
which included $269 million in capital and $180 million in development expense
for NGT.
    Navistar International Corporation, with world headquarters in Chicago and
1996 revenues of $5.8 billion, is the leading North American producer of heavy
trucks, medium trucks and school buses.  The company is the sales leader in
the combined United States and Canadian retail markets for the first nine
months of the fiscal year, achieving a 27.1 percent share that is consistent
with the same period a year ago.  The company also is a worldwide leader in
the manufacture of mid-range diesel engines, which are produced in a range of
160 to 300 horsepower.

SOURCE  Navistar International Corporation