Navistar International Corporation Case Study

Navistar International Corporation is currently America's largest manufacturer of medium and heavy-duty diesel trucks. Until 1986, Navistar was known as International International Harvester, a leading manufacturer of agricultural and construction machinery, with 47 manufacturing plants. Years of dramatic financial losses, however, forced the company to sell off these primary businesses to focus on the production of diesel trucks, a move that necessitated the layoff of thousands of workers and resulted in a reduction of sales by more than half. With a new name and a new "diamond road" symbol, the company looked forward to more successful years. International International Harvester's product line expanded to include a wide range of tools used to speed the production of food, including …show more content…
In 1974, such products were combined under the PayLine name to present "a united front to the industry. While sales in 1971 passed $3 billion, profits reached a mere $45 million. International Harvester's share in the construction and farm markets continued to decline, and it fell to a number two ranking in heavy trucks, after Ford Motor Co. Although the company had cut its employment from 98,000 to 15,000 and shuttered all but seven of its 42 plants, it still lost $3.3 billion from 1979 to 1985. Troubled by soft markets and persistent creditors, International Harvester entered a period of continuous restructuring. The corporation sold its construction line and then its agricultural holdings. The sale of its agricultural line to Tenneco for $488 million in 1985 helped the company reduce its long-term debt to less than $1 billion. In 1986, International Harvester was renamed Navistar International Corporation, a name that management hoped would reflect its new focus on high