Rumours abound, on both sides of the Atlantic, that Volkswagen is considering a bid for Navistar. Such a move would be eminently logical, in global synergy terms. In any case Volkswagen, not content with rivalling Toyota as the world’s number one car manufacturer, looks determined to challenge Daimler for the top spot in truck manufacture. It has already gained control of Scania and MAN.
Scania’s long-time Chief Executive, Leif Ostling, has now been put in charge of all of the VW group’s truck and bus operations. At the age of almost 67, he will be looking to make his mark in the few years before he retires. A VW takeover of Navistar would certainly be the kind of landmark achievement to consolidate his already august place in the history books.
Rumours abound, on both sides of the Atlantic, that Volkswagen is considering a bid for Navistar. Such a move would be eminently logical, in global synergy terms.
Navistar is currently at a low ebb, facing well-publicised problems with EPA emissions law compliance. It made a loss of US$172m in the second quarter of its financial year, which it attributes in part to a hold-up in truck sales caused by the emissions furore. However, its shares have held up, buoyed by the possibility of a takeover bid – with VW as the only serious predator in the frame – or of a merger with specialist off-highway and military truck maker Oshkosh.
Navistar and, in particular, all its vicissitudes regarding engine technology and consequent emissions certification problems, are well known to its potential would-be German acquisitor. Its 12.4-litre MaxxForce 13 engine, at the heart of the compliance controversy, is in fact an MAN design, albeit assembled under licence from largely US-sourced componentry in Huntsville, Alabama.
In order to meet Euro 6 requirements on NOx (oxides of nitrogen) levels on that engine, MAN has been obliged to add urea-fed SCR (selective catalytic reduction) to the EGR system which served the German company well, up to and including Euro 5. But Navistar has – many would say, stubbornly – refused to do the same in advancing from EPA 2007 to EPA 2010 regulations, leading to its current emissions ‘predicament’.
In order to meet Euro 6 requirements on NOx levels on that engine, MAN has been obliged to add urea-fed SCR to the EGR system which served the German company well, up to and including Euro 5.
Were a VW acquisition of Navistar to go through, MAN diesel engineers from Nuremberg could be expected to move into Huntsville without delay and implement an upgrade programme involving the adoption of SCR on the MaxxForce 13 engine and its 10.5-litre MAN-based MaxxForce 11 stablemate.
It can also be assumed that, under a VW/MAN mandate, Navistar’s MaxxForce 15 project, based on an EPA 2007 Caterpillar design, albeit updated with a common rail fuel system, but still relying on EGR alone to achieve EPA 2010 compliance, would be unceremoniously shelved. If a future VW-controlled Navistar wanted a big engine to deliver up to 600 horsepower, to compete with Cummins‘ ISX15, Detroit‘s DD15 and 16, and Volvo‘s D16, there are now two power units of that size and output available in-house – both V8s as it happens – from Scania and MAN, albeit in the latter instance produced under a joint venture with German construction equipment manufacturer Liebherr.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Alan Bunting has a background in engineering, and has been writing on commercial vehicle and powertrain related topics since the 1960s. He has been an Automotive World contributor since 1996.
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