A group of shareholders has filed a class-action lawsuit against Navistar International Corp. alleging that the OEM essentially lied to investors about its efforts to achieve compliance with EPA 2010 diesel-engine emissions rules.
The suit was filed in the U.S. District Court for the Northern District of Illinois on behalf of purchasers of common stock of Navistar International Corp. during the period between Nov. 3, 2010, and Aug. 1, 2012, inclusive.
According to Ryan & Maniskas, LLP, the law firm that filed the suit, the complaint alleges that throughout that period of time, “the company [Navistar] issued materially false and misleading statements regarding the company’s business and financial prospects…. [and] the company misrepresented and/or failed to disclose that:
(1) Navistar’s attempted methods to achieve compliance with EPA guidelines in truck manufacturing had failed and Navistar would be forced to revise its plan to meet guidelines, incurring enormous costs to the company;
(2) Navistar did not have engines ready to meet the 2010 EPA standards; and
(3) Navistar’s filings with the Securities and Exchange Commission contained incomplete and misleading disclosures, including statements about the costs of recalls and details of various debts.
The plaintiffs’ law firm has launched a dedicated website where members of the class defined by the suit can obtain more information about joining the class action.
Last July, Navistar declared it was giving up its attempts to comply with diesel-emission regs by using exhaust-gas recirculation (EGR) technology alone as opposed to integrating selective catalytic reduction technology (SCR) as all its heavy-duty competitors had down ahead of the EPA 2010 rules.
As a result, by last September, Navistar had reached an agreement with Cummins by which it would again offer SCR-equipped Cummins engines in its International trucks.
Last month, CEO Troy Clarke told the Wall Street Journal that the company was considering closing engine plants. Navistar has three facilities building engines.
“We build engines in three places and none of them is fully utilized. You just can’t make any money doing that,” Clarke told the Journal in an interview at the Mid-America Trucking Show in Louisville, Ky. “Underutilized manufacturing capacity is just a cost and it is a cost that we don’t have to bear.”