Volkswagen Is Getting Into The American Big Rig Business To Fix Someone Else's Diesel Problem

This week Volkswagen Truck & Bus announced a $256 million spend for 16.6 percent of the United States' heavy-truck outfit Navistar, which make International Trucks and IC Bus. The plan is ostensibly for VW to help Navistar comply with diesel emissions regulations. No, really!

As we reported yesterday, Volkswagen T&B already owns parts of European big-truck companies Scania, MAN and of course Volkswagen Caminhões e Ônibus. But the incursion into Navistar will give them a position in the U.S. truck market.

Navistar says VW has promised to hold on to their newly minted shares for at least three years, and details that the companies will leverage their alliance to buy parts at better prices and co-develop "all aspects of commercial vehicle development, including advanced driver assistance systems, connected vehicle solutions, platooning and autonomous technologies, electric vehicles, and cab and chassis components "in a press release.

But the focus of the partnership will apparently be "powertrain technology solutions" (engines and transmissions.) That and giving Navistar some desperately needed money. "The alliance will also strengthen Navistar's liquidity position," as they say.

With U.S. regulators turning up the heat on heavy truck emissions, Navistar has been scrambling for the technology to comply. As Reuters reported Monday, Navistar lost an incredibly large sum of money when their engine failed to meet EPA emissions standards in 2010.

Basically, Navistar spent some $700 million developing an engine that would suck exhaust gas back into the engine's cylinders to reduce tailpipe nitrogen oxide emissions. But it didn't work, and Bloomberg reports Navistar was penalized with a $2,000 fine per nonconforming engine built.

Other heavy truck companies made the emissions cut by using fluid injected into the exhaust downstream, similar to what many consumer diesel cars and trucks use. Navistar eventually ended up using Cummins' ISX15 engines for its heavy trucks but now seems to be looking to take another crack at reducing emissions on its own. Or rather, with help. From a company still trying to shrug off one of the biggest scandals in the history automotive industry. Caused by cheating on diesel emissions. Is this real life?

Whether VW is planning to leverage this into their own brand of big trucks remains to be seen, but according to Automotive News "Volkswagen Trucks CEO Andreas Renschler said a full merger with Navistar is possible..."

I hope Navistar's technicians are planning on triple-checking any emissions-related results VW presents.