Navistar Said to Explore Possible Sale of MWM Engine UnitDavid Welch
Navistar Inc., the heavy-duty truck maker that counts Carl Icahn among its largest shareholders, is exploring options for its South American truck-engine business and may sell the unit, people with knowledge of the matter said.
Navistar, based in Lisle, Illinois, is working with an investment bank as it conducts a review the MWM engine unit, the people said, asking not to be identified because the information is private. MWM, which sells truck engines mostly in Brazil, would likely fetch less than $500 million in a sale, one of the people said.
Since 2012, the truck maker has been reviewing everything outside of its core North American truck, engine and parts businesses to decide whether it should invest more money or sell some assets, said Jim Spangler a company spokesman. The company is not commenting on whether the MWM business will be sold, Spangler said.
Chief Executive Officer Troy Clarke is focusing Navistar on its core truck making business and cutting costs after striking a deal last year to avoid a proxy fight with Icahn and investor Mark Rachesky. Sales at Navistar’s global operations unit, which largely consists of the MWM unit fell 16 percent to $1.74 billion in the year through October 2013, according to the company’s annual report.
The company also sold its share of an Indian joint venture to Mahindra & Mahindra, its Monaco recreational vehicle unit, and a truck plant in Garland, Texas, as part of its plan to get back to profitability, Spangler said. Navistar’s annual loss narrowed to $898 million in the year through October 2013, from more than $3 billion a year earlier, data compiled by Bloomberg show.
Former CEO Daniel Ustian was replaced in August 2012 after he invested millions in an engine technology that could not meet U.S. government emissions requirements. Former General Motors executive Clarke took the CEO job in March.
Icahn and Rachesky’s MHR Fund Management LLC each own more than 16 percent of Navistar’s shares and each have two seats on the company’s board