Navistar International Corporation Q2 2009 Earnings Call Transcript

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2009-06-09 18:45:39.0

Tags: Vehicle, Goldman Sachs & Co., Call Transcript, Earnings, Mergers & Acquisitions, Strategy, Investment, Finance, Management, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Jerry Revich – Goldman Sachs.

Jerry Revich – Goldman Sachs

Dan, you mentioned that Archie was on the line, Archie I’m wondering if you can discuss whether you plan on competing for the ECV II recompete and where do you see the timing on that program?

Archie Massicotte

Sure. For sure we are going to compete for ECV II. Well actually Humvee replacement, that’s the AM General Humvee as we know it today. The military made a comment recently that said that they’re going to compete it rather than go to a sole source contract. We are definitely going to compete for that, we’re already working on some design proposals as to what we can bring to the table for that. That is one of our targets for sure.

Jerry Revich – Goldman Sachs

Archie, how is the timing on that bid look like? Do you have a sense for when the RP will be formerly out and when the decision is going to be made?

Archie Massicotte

I don’t have that intelligence right now. I would anticipate though, this is purely guessing, I think probably latter part of this year possibly in to the first quarter of next year.

Jerry Revich – Goldman Sachs

In terms of a decision being made?

Archie Massicotte

By the time the RP gets written and submitted and go through the evaluation process it probably won’t occur to sometime mid 2010.

Jerry Revich – Goldman Sachs

Archie, you alluded to the inclusion of mine resistant vehicles on the future combat system platforms, can you talk about how you see the military’s target allocation for mine resistant vehicles and the total tactical vehicle fleet going forward? Do you have a sense, are they thinking 5% of the total fleet, 10%, how are you thinking about that?

Archie Massicotte

I think that’s still being rejuggled right now within the Pentagon. As you know, Mr. Gates has gone back and relooked at the whole acquisition of wheeled vehicles as well as other systems that the military is using. They’re trying to figure out what their next strategy will be as they look at the replacement of such vehicles including FMTV and other programs that are out there. We are poised and ready and I’m going to express the fact that this fits our wheel house very well with where they’re trying to go. That has not been confirmed yet as to what their strategy will be long term but we are aggressively on top of that and we will be watching that very closely.

 

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