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Navistar CEO sees 'obvious' synergies with Oshkosh
December 14, 2011 / 6:51 PM / 6 years ago

Navistar CEO sees 'obvious' synergies with Oshkosh

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* “Open” to collaboration, Ustian says

* Considered idea prior to Icahn’s investment

By John Stoll and Scott Malone

NEW YORK, Dec 14 (Reuters) - Billionaire investor Carl Icahn is not the only person who thinks a tie-up between U.S. heavy truck makers Navistar International Corp (NAV.N) and Oshkosh Corp (OSK.N) might make sense.

So does Dan Ustian, Navistar’s chief executive, though he contends he had the idea before the activist investor took 10 percent stakes in the two companies.

“We believe there is some potential for synergies with us and Oshkosh but it’s probably in two isolated markets, the defense business and the commercial truck business,” Ustian said at the Reuters Global Manufacturing and Transportation Summit in New York on Wednesday.

“We are open to thinking about how we would collaborate in those two areas,” Ustian said. “I can’t say what that looks like. But collaboration makes sense in those two areas.”

Icahn in October disclosed his stake in Navistar, and people familiar with the situation said he was interested in triggering a merger of the two companies.

He sought seats on each firm’s board, but backed down on nominating his own slate for Warrenville, Illinois-based Navistar’s board after the company agreed to phase out its staggered directorships in favor of having directors serve for one-year terms.

Oshkosh has taken a more combative tone, and earlier this week the company accused Icahn of “pursuing his own personal agenda” by nominating a slate of six directors to the Oshkosh, Wisconsin-based company’s 13-member board. The company said it had maintained an open dialogue with him but said that Icahn had not explained his plans. [ID:nL3E7NC4EZ]

An Oshkosh spokesman could not be reached for immediate comment on Wednesday.


Navistar’s Ustian declined to comment on whether any talks have taken place between the two companies, and said it was “fair” to say that Icahn’s interest had re-sparked his interest in the idea.

“I don’t see that really it’s any different than any other shareholder that wants a return,” Ustian said of Icahn. “He’s got 10 percent so we have to pay attention to him but it’s no different than anyone else. If we give them a return, they’ll be happy with it.”

Navistar had its eye on Oshkosh for several years but was deterred by the company’s large debt load, the after-effect of large acquisitions, Ustian said.

Despite Icahn’s interest, the two company’s shares have lagged the broader U.S. stock market this year. Navistar shares are down 37 percent and Oshkosh is down 44 percent for the year, while the Standard & Poor’s capital goods industry index .GSPIC is down just 6 percent.

Ustian also said the company expects to see continued growth in the U.S. heavy-vehicle industry, with volumes rising above 300,000 trucks in 2012. He said the company’s revenue will rise in 2012 toward the $16 billion to $18 billion range, but didn’t give a specific forecast for 2012.

Navistar and Oshkosh shares were little changed in Wednesday afternoon trading, both down less than 1 percent.

(Reporting by John D. Stoll and Scott Malone; Editing by Gerald E. McCormick and Derek Caney)

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