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Navistar Shares up 2%


Navistar International’s share is up 2.38% closing on Friday, at $21.98, thanks to US Environmental Protection Agency, who announced the day before that, they’ll allow makers to sell diesel powered vehicles that do not meet their emission standards.

The new rule will permit Navistar International Corporation to sell its properly working engines by a maximum fine of $3800, which is actually twice over what it has been paying. The share in the manufacturer was up as much as 9% and by noon, they met at $22.55, a gain of $1.08.

Chief operating officer and president at Navistar Co, Troy Clarke said that they can now offer their customers and dealers with clarity and assure as clean engine machinery and looking forward to make use of Final Rule as and when required. He said fines will not be efficient and company need not pay the fine for the non-compliant engines that it has sold previously.

The heavy duty engines are used in commercial trucks, school buses, and other automotives, weighing over 33,000 pounds. It offers non-compliant engines because technology it engineered couldn’t meet federal emission standards to minimize smog-causing nitrogen oxide. The technology adopted cost more than $700 and the company modified its course following a 2nd quarter report of $172 million loss.

In the beginning of the year, the company told that it would merge its approach with the technology used by its rivals to lower emissions thereby making its engines certified. The Lisle-based maker is also planning to purchase a competitor’s engine to meet the emission standards.

EPA issued a short-term regulation in Jan that permitted makers to sell non-compliant engines, provided they pay a fine of $1919 each. Navistar rivals, including Cummins Inc, Daimler AG, and Mack Trucks, successfully sued Fed, stating that the organization was offering Navistar special treatment. Hearing EPA increased the extra cost that Navistar was supposed to pay EPA said their new rule allows makers to prolong manufacturing and selling non-compliant engines that are very near to air pollution standards.

In 2001, EPA found that commercial buses and heavy duty trucks accounted for about 1/3rd of nitrogen oxide emissions and by reducing these air pollutants, EPA expects to save 9500 hospitalizations and 8300 early death. The company said it would take action to meet its targeted cost reduction goals and it estimates the prices associated with layoffs and buyouts to be somewhere between $40 and $60million.


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