Navistar Turns to Cummins for 15-liter Engines, SCR Systems

Beginning early next year, the Cummins ISX15 engine will be offered as a part of International’s on-highway truck line-up, Navistar International Corp. said Thursday. The truck maker also will be using an emissions aftertreatment system provided by Cummins in its Maxxforce engine line.

The announcement comes less than a month after the Navistar said it would adopt a urea-based aftertreatment system to meet 2010 Environmental Protection Agency emissions regulations and position the company to meet coming greenhouse gas rules in advance of 2014 and 2017 requirements. Navistar had gambled on making do with an exhaust gas recirculation (EGR) emissions solution for EPA10. Selective catalytic reduction (SCR), adopted by all other North American heavy-duty truck and engine makers, additionally treats the exhaust with urea, or diesel exhaust fluid.

To accelerate delivery of its new engine technology, dubbed “In-Cylinder Technology Plus” (ICT+), a  non-binding memorandum of understanding calls for Cummins Emission Solutions to supply its aftertreatment system to Navistar to be combined with Navistar’s advanced in-cylinder engine technology,

“With this clean engine solution, we are taking the best of both technology paths to provide our customers with the cleanest and most fuel efficient engines and trucks on the market and to meet stringent U.S. emission regulations,” said Daniel C. Ustian, Navistar chairman, president and CEO.

The company intends to continue to build and ship current model trucks in all vehicle classes using combinations of earned emissions credits and/or non-compliance penalties during the transition to ICT+. Navistar also said it continues to have “productive discussions” with the EPA and the California Air Resources Board regarding its transition to ICT+.

 Navistar lost $172 million for the quarter ended April 30, including $104 million in warranty charges related to 2010 emission standard engines. In an update provided with the notice of the Cummins MOU, Navistar expects a pretax loss of between $105 and $145 million in the current quarter, including the impact of the engineering integration and non-conformance penalties.

“The actions announced today establish a clear path forward for Navistar and position the company to deliver a differentiated product to our customers and provide a platform for generating profitable growth,” Ustian said.

A Cummins spokesman said the MOU signifies an intent to negotiate a supply agreement, and details are still to be worked out.

But she confirmed that Cummins does provide aftertreatment solutions to other North American heavy duty truck makers, with whom Cummins works “very closely” to integrate the technology, just as it does in supplying its engines.

The Cummins Heavy Duty Engine Plant in Jamestown, N.Y., produced more that 62,000 ISX12 and ISX15 diesel engines with SCR last year.

Navistar on Thursday also revealed a Securities and Exchange Commission investigation of the company, relating to various accounting and disclosure issues dating to Nov. 1, 2010.