Cummins, Navistar End Joint Venture Talks
May 15, 2001 12:00 PM, Refrigerated Transporter StaffCummins and Navistar, parent company of International Truck and Engine, have ended talks that would have formed a joint venture for high horsepower engine development. The talks had been aimed at producing a heavy truck engine that would meet new diesel emission rules.
Cummins had been asking the state of Indiana for a $35 million loan guarantee for the venture. Heavy debt and a loss o f $26 million in the first quarter 2001 had left Cummins unable to borrow from the private capital market for the venture. Cummins has already spent approximately $500 million on the project, which probably would require at least another $300 million.
Slow truck sales, expected to be down 20% in 2001 from 2000 results, have hurt Cummins recently.