By Charlie Morasch, Land Line contributing writer
A major American truck maker is being taken to court over claims the company allegedly kept investors in the dark rather than reveal bad news of its faltering emissions technology.
Plaintiffs asking for class action status filed a civil lawsuit in federal court in Illinois against Navistar International Corp., makers of International trucks and MaxxForce engines.
The lead plaintiff is the Construction Workers Pension Trust Fund, and the suit names Navistar, former company CEO Daniel Ustian and former chief financial officer Andrew Cederoth. Plaintiffs claim the company “issued false and misleading statements concerning the company’s financial condition and future business prospects” during a two-year period, according to court documents.
Navistar declined to comment.
“As a matter of policy, Navistar does not comment on pending litigation,” Navistar Spokesman Stephen Schrier told Land Line Magazine Tuesday.
The suit lists several statements by former CEO Ustian indicating Navistar’s Exhaust Gas Recirculation-system engine was headed toward EPA certification. The suit claims those statements led to artificially high stock prices, including a high of $70 in April 2011.
Last summer the company announced it would join other truck manufacturers and employ Selective Catalytic Reduction to meet 2010 EPA emissions standards. Stock plummeted to below $20 a share.
The suit also quoted former Navistar executive vice president Jim Hebe as saying at a company press event: “We have got the right emissions strategy, finally. … The public will see a more upfront approach from Navistar. We’re through with the BS. We’ve had enough of it the past three years.”
Court documents state Navistar has more than 80 million shares of stock owned by hundreds of thousands of investors.
The company appeared to be emerging from a stormy few years after it reached a verbal agreement last summer with Cummins to put Cummins engines in International trucks.
To read more Land Line coverage of Navistar, click here and here.
The lawsuit’s civil complaint is posted here.