Years Later, Navistar Is Haunted by a Big Engine Blunder

For much of the past decade, Navistar International, the largest U.S. builder of school buses and long-haul freight trucks, bet on a diesel engine emission technology that none of its rivals had adopted. That decision proved disastrous: more than $700 million lost, the ouster of its chief executive, and costs that continue to this day.

The company expects to pay warranty costs for its prior engines until the end of 2015, although executives said today that the expense has begun to decrease. “Clearly, we are disappointed that our previous engine strategy continues to negatively impact us in the form of additional warranty expense, but we will continue to stand behind our products and manage this issue as these engines work their way through the standard and extended warranty cycles,” Troy Clarke, Navistar’s president and CEO, said in a statement today.