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TRUCKMAKERS' NEWS * USA - Navistar, the sole independent manufacturer of trucks and buses in the United States
New York,NY,USA -The New York Times, by JOE NOCERA -November 28, 2008: -- ... I had gone to Chicago to learn about the effects of the credit crisis on a large, industrial, somewhat under-the-radar company called Navistar, the sole independent manufacturer of trucks and buses in the United States... Founded at the turn of the last century as a maker of agricultural equipment, it was known as International Harvester until the mid-1980s (truckers still call it “International”). The company has survived two World Wars, the Great Depression, a near-death experience in the early 1990s, and, most recently, an accounting problem severe enough to cause it to be delisted for almost a year and a half from the New York Stock Exchange... Because it is conservatively managed — no fancy financial engineering, no excessive debt, no risky loans to customers — Navistar is going to survive this crisis as well. But that doesn’t mean it isn’t feeling any pain, or that it doesn’t see the effects of the crisis all around it. On the contrary, companies like Navistar see the effects of the financial crisis far more clearly than most policy makers do. Because trucks haul 70 to 80 percent of everything we buy, truck drivers and trucking companies feel even the slightest economic downturn. They’re on the front lines of the crisis... Something else happened to Navistar in September. Its stock price went into free fall. After working through its accounting issues, the company was relisted on the New York Stock Exchange in July, with its stock in the 60s. (It had traded over the counter during the delisting.) But in a two-month span between mid-September and mid-November, it dropped from $62 a share to $15... Though no one at Navistar can prove it, they strongly suspect that the stock has been hammered because hedge funds, badly hurt during this phase of the financial crisis, have been forced to sell some of their more liquid positions to return money to exiting shareholders. I suspect this theory is correct, and it would be yet another way that fallout from the financial crisis has spread from New York to the rest of the country... (Photo by Sally Ryan for The New York Times - Dan C. Ustian, chief of the truck and bus maker Navistar)Labels: truckmakers' news USA
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