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3/3/2016 11:45:00 AM Write a Letter to the Editor Write a letter to the Editor

Navistar CEO Troy Clarke Opens Door to Partners as Truck Market Sours

Jim Young/Reuters

Navistar International Corp. CEO Troy Clarke is pushing the door open for potential deals as he fights to keep the truck maker’s turnaround on track amid a U.S. sales slump.

"Everything we're doing today just makes us a better partner," Clarke told Reuters during a recent interview at the company's Lisle, Illinois, headquarters. "Everything we do is just making a better company that performs well."

Analysts have speculated that Navistar could be a candidate for an acquisition or alliance, possibly with the truck operations of German automaker Volkswagen AG.

Navistar, under Clarke, agreed to manufacture a line of medium-duty trucks for the CEO's former employer, General Motors Co., due to launch in 2018 for sale through GM's Chevrolet brand.

"We have the opportunity to do more of those kinds of things in the event we continue to remain a stand-alone company," Clarke said. "On the other hand, there are companies out there that could use our ability to do that kind of stuff to grow their footprint in North America."

Clarke has signaled his openness to prospective partners in the past, although he has not addressed the issue as directly in recent calls with analysts. His comments to Reuters come as the company is under increasing pressure.

Navistar still is recovering from disastrous missteps on emissions control technology that led many customers to take business elsewhere over the past several years.

Clarke has promised the company will generate profits and cash flow this year after losing $187 million on $10.1 billion in revenue in 2015. But he is fighting a slump in U.S. commercial truck sales that has accelerated during the past several months.

Orders for Class 8 highway trucks — the 18-wheelers that haul freight across the country — fell 25% to 284,000 vehicles in 2015 and could tumble to 250,000 this year, industry forecasters said. January orders were down 48% on the year, according to freight transportation forecaster FTR.

Navistar's shares are off more than 70% from a year ago, and its market cap of $720 million is less than its cash on hand of around $1 billion.

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By Nick Carey

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