Volkswagen announced a major partnership with Navistar


Volkswagen announced a major partnership with an Illinois-based trucking company called Navistar, a sign that the automaker is eager to move passed its emissions scandal and focus on expanding its operations. Navistar also owns International Trucks, which encompasses a variety of medium-duty trucks.

VW said it has forged a technology and purchasing deal with Navistar, which in addition to trucks also manufacturer’s school buses and large-scale engines. The deal, which was first reported by Reuters, gives VW a 16.6 percent stake, or $256 million, in the company and a much-needed foothold in the US for its trucking business.

The partnership also puts Navistar on more stable footing. As noted by Forbes, the Lisle, Illinois-based Company had squandered billions of dollars on a diesel engine that failed to win the approval of the Environmental Protections Agency. Last month, US regulators announced new rules to reduce carbon emissions from big trucks, putting pressure on Navistar to find a technology partner.

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Volkswagen could face federal criminal charges in the US stemming from its diesel emissions scandal. VW and Department of Justice prosecutors are said to be in negotiations to settle the case before the end of the year. In June, VW reached a $14.7 billion deal with federal regulators over Diesel gate, including the offer of buybacks for thousands of affected vehicles. A few weeks later the company was sued by several US states for violating a variety of state environmental statutes.

Volkswagen’s commercial vehicles division is trying to build itself into a global truck manufacturer having absorbed Germany’s MAN and Sweden’s Scania, while Navistar is looking for a technology partner to build engines that can meet ever more stringent emission rules.

For Volkswagen, Navistar is seen as an attractive target because it has a large North American dealer network, something the German company lacks.

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