Navistar to introduce new engine to meet 2010 emission standards

Lisle-based Navistar International Corp., the maker of International brand trucks, said it’s introducing a new engine to meet 2010 U.S. Environmental Protection Agency emission regulations.

Navistar said the engine, called In-Cylinder Technology Plus, includes “urea-based aftertreatment.” The company expects the new engine to be available in early 2013, Navistar said in a statement.

Navistar invested $600 million to develop heavy truck engines which failed to comply with the 2010 rules. The U.S. Court of Appeals in Washington on June 12 threw out a U.S. Environmental Protection Agency interim rule that allowed Navistar to keep selling noncompliant engines if it paid penalties of as much as $2,000 each.

The engine troubles have helped make Navistar, which also makes commercial and military trucks as well as buses, a potential takeover target. Billionaire investor Carl Icahn increased his stake to 11.9 percent in June and hedge fund manager Mark Rachesky disclosed a bigger position, 13.6 percent, as Navistar slumped to a three-year low, prompting the company to adopt a poison pill to help fend off hostile bids.

Navistar last month lowered its full-year profit forecast to a range of break-even to $2 a share, excluding some costs. In February, the company forecast 2012 profit of as much as $5.75 a share, then reduced the figure to a maximum of $5.25 a share in March.

Navistar rose 4.1 percent to $29.98 at 7:14 a.m. in New York before the start of regular trading. The shares fell 24 percent this year through yesterday.