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Report on Navistar’s commitment
to environmental, social and economic innovation
Sustainability 2007
Navistar’s Commitment to Sustainable Innovation
C H A I R M A N ’ S L E T T E R
Sustainability means ensuring success in the present without compromising
the future. At Navistar, we partner with our customers and suppliers to pursue
innovations that support sustainability in all its aspects: economic, environmental
and social. Our innovations include:
w Aerodynamic products that save fuel and help truckers make a better living.
w The fi rst no-smoke, no-smell engine technology certifi ed by the U.S. Environmental
Protection Agency as meeting 2007 standards for particulates and hydrocarbons.
w The fi rst commercial diesel hybrid school bus.
w The fi rst commercial diesel hybrid medium duty truck.
w Revolutionary products that protect peacekeepers around the globe.
w Emissions reductions that meet and beat regulatory requirements using
sustainable advances in engine technology, not expensive add-ons.
w Ongoing reductions in our plants’ energy use, waste disposal and
greenhouse gas emissions.
w Remediation of brownfi eld sites and creation of new wildlife habitats.
w Year-over-year improvements in employee health, safety and wellness.
w Technical education that teaches new generations how to improve the world.
This sustainable approach isn’t just smart, it’s good business.
It enables us to create great products that drive the economy while also helping our
environment. It helps us reduce our own costs, making it easier for us to keep on
improving. And it helps us grow profi tably, which means we can provide economic
livelihoods in more communities around the world.
We’re proud of the innovators throughout Navistar who constantly
create better products and fi nd better ways of doing business. We hope you’ll
enjoy learning about their contributions and about our broad commitment to
sustainable innovation.
Sincerely,
Daniel C. Ustian
Chairman, President and CEO
1
Hybrid vehicles capture braking energy that would
otherwise be lost. Because stop-and-go driving makes
the most of this opportunity, school buses like the
CE diesel hybrid from IC Bus are an ideal use of this
technology. Each bus can save 800 gallons of diesel
fuel a year.
Believing that good environmental practice is
good business, Navistar is committed to pursuing sustainable
strategies in both our products and the way we operate. Our
sustainable approach to product stewardship builds on sound
science and proven technology to reduce energy usage and
emissions, while addressing the issue of global climate change.
Meanwhile, our facilities undertake improvements that not
only help the environment, but also save money and drive
future enhancements.
P R O D U CT ST E WA R D S H I P P U R S U E S A
S U STA I N A B L E PAT H
Through our advances in diesel trucks, school
buses and engines, Navistar is a leader in improving today’s diesel
technology, which delivers many environmental benefi ts:
w Mileage per gallon of fuel that is 30 to 40 percent better than
gasoline, with equivalent reductions in carbon dioxide (CO2).
w Particulate matter (PM) that has been reduced by more than
99 percent since the advent of regulation.
w Emissions of hydrocarbons (HC) and carbon monoxide (CO) that
have been cut to near-zero levels.
Based on our continued enhancements in sustainable technologies
like exhaust gas recirculation (EGR), we’ve led the industry in reduc-
ing emissions. Navistar developed technology that met 2007 federal
standards for PM and HC six years ahead of government require-
ments. Our 2010 engines will use proven engine and aftertreatment
technologies to meet federal standards for oxides of nitrogen (NOx),
cutting emissions by more than 90 percent.
A E R O DY N A M I C T R U C K D E S I G N
SAV E S E N E R GY
We believe that increasing fuel effi ciency and
reducing emissions from commercial trucks and school buses
results in signifi cant benefi ts for all of us. And we strive to be
the leader in developing energy-effi cient transportation solutions
that maximize diesel’s benefi ts:
w The International® ProStarTM long haul truck, which was launched
in 2007, and the International® LoneStar®, which was introduced
in 2008, feature aerodynamic designs that reduce diesel fuel
consumption and lower emissions of greenhouse gases (GHG).
Good Environmental Practices Sustain Future Improvements
w Tests conducted to the standards of the Society for Automotive
Engineers (SAE) and the Technology & Maintenance Council
have shown that ProStar is more aerodynamic than any other
Class 8 truck being operated in North America, delivering an
annual fuel savings of at least 1,300 gallons of diesel fuel
compared with traditional models.
w In April 2007, ProStar was recognized by the U.S. Environmental
Protection Agency (EPA) as a SmartWay eligible tractor for its
signifi cantly better environmental and fuel consumption performance.
w Meanwhile, our MaxxForceTM 11 and MaxxForceTM 13 big bore
engines set new industry standards for heavy-duty diesel perfor-
mance, with fuel effi ciency that surpasses previous models by
nine to 13 percent.
AWA R D - W I N N I N G H Y B R I D T E C H N O LO GY
C U TS E M I S S I O N S
Navistar is committed to reducing carbon emissions even
further through innovative diesel hybrid technology:
w Our bus subsidiary IC Bus, LLC partnered with Enova
Systems, Inc., to develop the nation’s fi rst hybrid school buses,
which cut emissions by up to 70 percent while improving fuel
effi ciency by up to 70 percent – saving 800 gallons of fuel
per bus per year.
w In 2007, our Workhorse Custom Chassis unit developed and
delivered 25 hybrid commercial truck chassis to customer UPS.
w And in November, Navistar announced that it is the fi rst company
to enter line production of hybrid commercial trucks. The
International® DuraStarTM hybrid, a diesel hybrid electric medium-
duty truck, reduces emissions and provides customers with fuel
savings of 30 to 40 percent over standard diesel technology.
Each DuraStar saves nearly 1,000 gallons of fuel every year.
In recognition of its contributions to the commercial development of
diesel hybrid technology, the company received the 2007 Blue Sky
Award from WestStart-CALSTART, the U.S.’s leading advanced
transportation technology industry organization working to support
and accelerate the growth of companies developing clean and
energy-effi cient transportation technologies.
2
3
non-hazardous waste, avoiding landfi ll disposal costs.
Savings: $537,125.
w Garland’s increased recycling of paper, cardboard, metals and
plastics equated to a greenhouse gas (GHG) reduction of
857 tons.
w An employee team at the Melrose Park, Illinois engine plant
developed a new water-based paint for the engines that reduced
paint use by 82 percent and cut paint sludge by 12.5 percent.
Estimated annual savings: $115,000.
w The Santo Amaro, Brazil engine plant instituted a recycling
program for surplus parts that reduced metal disposal by
330 tons per year. Annual savings: $38,500.
w The Canoas, Brazil engine plant eliminated the use of short-lived
wooden packaging for the shipment of machined parts, replac-
ing it with maintenance-free surplus metal containers. Savings:
$100,000 in avoided costs for a new packaging system, plus
$37,000 per year in reduced purchases of packaging.
w The Jesus Maria, Argentina engine plant developed a centrifu-
gation process that reduced the coolant content in metal chip
waste created by the machining process, enabling the chips to
be recycled and used as a raw material by foundries. Savings:
at least $160,000 per year.
w The Indianapolis engine plant is partnering with a company that
will recycle the plant’s swarf – the fi ne particles resulting from
grinding or honing metal parts – as a pig iron replacement.
Estimated annual savings: $20,000.
w The Chatham, Ontario truck assembly plant has achieved a
98 percent reduction in the odor units emitted by its paint shop,
using thermal oxidation technology to capture and eliminate
volatile organic compounds (VOCs).
R E STO R I N G H A B I TATS
In 2007, Navistar became a member of the Wildlife Habitat Council,
a nonprofi t group consisting of corporations, conservation organiza-
tions and individuals dedicated to restoring and enhancing wildlife
habitat. Our Springfi eld, Ohio assembly operations and our Fort
Wayne, Indiana, truck development and technology center have
established wildlife management teams, comprised of employee
volunteers, who are working to create and restore wildlife projects
on their larger areas of open land. More than 200 acres of land at
the Springfi eld site have already been targeted for a project.
C O M M I T T E D TO R E D U CT I O N S I N
G R E E N H O U S E G A S E S
In our operations, as well as our products, Navistar
demonstrates a commitment to reducing GHGs:
w The company is active in the Business Roundtable’s Climate
RESOLVE program, which focuses on monitoring and reducing
GHG emissions from facilities and products. Navistar is now
measuring current emissions and developing a baseline for
setting aggressive but achievable reduction goals.
w The company also is working with the University of Chicago and
independent research organization Resources for the Future to
study the costs and benefi ts of reducing GHG emissions from
our facilities and products.
w Most of our short-term GHG reduction will come from energy
conservation efforts. Energy use data collected from 2007 will be
used to set goals, including reductions in energy consumption
during both operational and non-operational periods.
R E D U C I N G U S E O F E N E R GY, M AT E R I A LS
Consistent with these goals, Navistar’s facilities
continuously undertake energy effi ciency
enhancements, reduce use of materials, and emphasize
recycling and other sound practices that eliminate environmental
impacts and reduce cost. Here are just some of the company’s
achievements during the past year:
w The Fort Wayne, Indiana, truck development and technology
center replaced an older, ineffi cient control unit driving the
facility’s cold room refrigeration system with a new 260 kW
variable frequency drive and a high-effi ciency electric induction
motor. Estimated annual savings: $13,500.
w The Garland, Texas truck assembly plant installed an automated
air compressor system that lowered working pressure by more
than 20 percent and cut the energy cost of producing
compressed air by 36 percent. Annual savings: $73,532.
w Minimizing its electronic waste stream, the Fort Wayne opera-
tions instituted a program giving 84 used computer monitors to
employees on a fi rst-come, fi rst-served basis. Each employee
signed a waiver pledging to dispose of the unit appropriately at
the end of its useful life. Cost avoidance: $1,050.
w The Garland truck assembly plant recycled 4,297 tons of
In high school, John Capilupo was a long-distance
runner. Today, he’s a daily user of the fi tness center
at the company’s Melrose Park, Illinois engine plant.
Thanks to regular workouts, John has lost weight,
gained improved control over his blood pressure –
and completed two marathons.
4
5
Navistar’s commitment to society embraces the
health, education and well-being of the communities where we do
business. That commitment begins with our employees. In order to
support more than 40,000 retirees who receive health care benefi ts,
Navistar works to achieve maximum health, safety and productivity
among our 17,200 active employees. Navistar’s employee empow-
erment initiative, Vital Lives, provides a comprehensive, multi-
disciplinary and integrated approach to health and productivity
management, including:
1) Primary prevention, which seeks to prevent smoking, obesity or
other risk factors;
2) Secondary prevention, which manages or reduces the risk factors
in order to prevent disease; and
3) Tertiary prevention, which aims to manage disease in order to
prevent catastrophic consequences.
E M P LOY E E S TA K E A DVA N TA G E O F LO CA L
H E A LT H , SA F E T Y P R O G R A M S
Our comprehensive wellness programming is
tailored to local needs by volunteer teams at 30
facilities. It helps employees improve their quality of life through
reducing health and safety risks, promoting evidence-based care
and encouraging smart health care spending:
w Navistar offers each of its employees an annual, confi dential
Health Assessment (HA), which identifi es ways to address be-
haviors that increase the risk of current and potential
health issues.
w Employees use the HA to take control of chronic conditions,
including pulmonary disease, coronary artery disease, asthma,
peptic ulcer disease, heart failure and diabetes.
w Incentive-based programs include Spring Tune-Up, a six-week
nutrition program, and Trucking Across North America (TANA), a
13-week competition that uses a pedometer to log employees’
weekly exercise miles.
w Our Truck, Engine and Parts groups have initiated programs
aimed at improving our already strong workplace safety culture.
The Truck Group has partnered with DuPont Safety Resources to
drive safety into our plants as a key value and improve operating
Social Benefi ts Encompass Health, Wellness and Education
discipline. Using this approach, the group has reduced OSHA
recordable cases in six plants from approximately 600 in 2006 to
350 in 2007, and has established an aggressive target of 150
for 2008.
w Individual plants have recently achieved major safety milestones,
with our Garland, Texas truck plant reaching one million hours
without a lost-time case, and our Huntsville, Alabama plant
reaching 1.5 million hours.
Helping employees maintain a healthy lifestyle minimizes absentee-
ism, improves productivity, and keeps health care costs manageable
for the company and employees alike:
w Navistar’s combined worker’s compensation and disability costs
decreased for the sixth straight year.
w The company has successfully kept health care costs fl at during
the past four years.
w Navistar also has minimized cost shifting to employees at a time
when growth in U.S. health care costs has outpaced infl ation.
A D D I N G TO T H E W O R L D ’ S K N O W L E D G E
O N W O R K P L A C E H E A LT H
Navistar also actively contributes to global
knowledge on workplace health issues by
supporting health research initiatives that are based on careful
analysis of company medical claims data. The company’s vice
president for Health, Safety, Security and Productivity, Dr. Bill Bunn,
serves on advisory committees for the National Academies of
Sciences, the Board of Scientifi c Counselors of the National
Institute for Occupational Safety and Health (NIOSH) and other
groups, and, since 2006, has served as editor-in-chief of the
Journal of Health and Productivity Management.
The company serves as international chair for the Multinational
Collaboration, which meets at the White House on a twice-yearly
basis, and our programs have been recognized by the International
Society for Travel Medicine.
6
GLOBAL TOOLS FOR SAFETY AND SECUR ITY
Thanks to the growth of our global business and
the growing numbers of company expatriates in countries such as
Afghanistan, Navistar is focused on combating the global threats
represented by terrorism, potential pandemics and other risks. Our
command center is capable of tracking security issues systemwide.
Our automated traveler monitoring system keeps travelers informed
about any in-country security, political, and medical risks, and
provides a historical trace in the event of an emergency or eventual-
ity such as a natural disaster or terrorist event. Since the system’s
inception, the company has experienced no accidents, losses, or
other signifi cant incidents.
T E C H N I CA L E D U CAT I O N B U I L D S
P R O M I S I N G CA R E E R S
In addition to supporting many good causes that help those in need,
Navistar and its employees place a special emphasis on education.
Company technical and environmental education programs address
the needs of students in underserved public school systems, while
mentorship from industry leaders gives students a head start toward
a meaningful, stable career path:
w Navistar’s collaboration with Chicago Vocational Career Acad-
emy (CVCA), a high school on Chicago’s South Side, marked
its seventh anniversary in 2007. The three-year curriculum co-
developed by Navistar, which has been certifi ed by the National
Automotive Technicians Education Foundation (NATEF), has
trained hundreds of inner-city youths as qualifi ed diesel truck and
engine technicians, with up to 80 percent of graduating students
landing jobs.
w In 2007, Navistar worked in partnership with the Indianapolis
Public Schools (IPS) to establish a three-year diesel technician
program at the Career & Technology Center at Arsenal Technical
High School, the fi rst of its kind in the state of Indiana. Navistar
and IPS are moving ahead to seek NATEF certifi cation of this
program.
w Navistar’s support for the Society of Automotive Engineers’
“World in Motion” program provides middle school students with
much-needed programs in math and science.
Social Benefi ts
w Since 1995, MWM International Motores in South America has
engaged with the community through a number of programs and
relationships. The award-winning Formare School program, which
operates in Brazil and Argentina, introduces disadvantaged
16- to 18-year-olds to manufacturing, engineering and
administrative careers.
w MWM also has spearheaded an award-winning social program,
Projeto Crescer (“Project Grow Up”), which has provided on-the-
job training for more than 200 underprivileged teenagers in Santo
Amaro and Canoas, Brazil. After a year-long training program,
qualifi ed interns are hired or given recommendations to other
appropriate employers, and Navistar continues to work with them
for up to a year after they leave the internship.
S C H O O L P R O G R A M S F O ST E R SA F E T Y,
E N V I R O N M E N TA L AWA R E N E S S
w IC Bus has teamed with the nation’s top industry organizations to
develop a comprehensive bus safety program, aimed at students,
parents and school offi cials, called “Be Cool. Bus Rules!TM”
w The Chatham-Kent Children’s Safety Village near our Chatham,
Ontario truck assembly plant educates thousands of children on
safety matters.
w Our Canoas, Brazil engine plant has developed an environmental
awareness program, Mutirão Ambiental, which includes children
from the Formare School.
w Meanwhile, our engine plant in Jesús María, Argentina donates
supplies and instructional support for environmental education
programs at the Francisco Ortiz de Ocampo of Jesús María
elementary school.
A R E C O G N I Z E D L E A D E R I N D I V E R S I T Y
Diversity, one of our key strategies for growth, brings Navistar a
number of tangible benefi ts, including innovation, high-quality
products and services, and improved customer relationships.
The company has been recognized by DiversityInc magazine as a
leader in both employee and supplier diversity, and has also been
ranked one of the 50 best companies for minority engineers.
7
Students at the Chicago Vocational Career Academy learn about diesel technology from a curriculum
developed by Navistar. Using four state-of-the-art
laboratories, they work on I-6 and V-8 diesel engines,
overhaul transmissions and differentials, and fi x trucks’
heating, ventilation and air conditioning systems.
8
Navistar’s manufacturing roots in Springfi eld, Ohio
date back to the mid-1800s. Today, more than fi ve
million trucks later, the Springfi eld Operations uses
advanced manufacturing technology to assemble
International® DuraStarTM and DuraStar hybrid trucks.
As a maker of trucks, school buses and engines that transport goods
and people, Navistar has a central role in driving economic benefi ts for our
customers, as well as our shareholders. Our continued growth and profi tability is also
vitally important to our 17,200 employees and 40,000 retirees. For more information on
our company’s fi nancial performance and governance standards, please visit the Navistar
Investor Relations Web site at http://ir.navistar.com/.
We also play a major role in the economies of our plant communities. In addition to
building new plants and other facilities in the U.S. and elsewhere, we have continued to utilize
our established plants for continued long-term work. For example, our truck assembly plant
in Chatham, Ontario has been selected to build our new premium Class 8 long haul product,
the International® LoneStar®. Our economic impact also extends to our supplier base. We are
committed to sourcing $1 billion from minority- and women-owned suppliers by 2009.
I N V E ST M E N TS I N C O M M U N I T Y D E V E LO P M E N T
We provide extensive education, health and safety benefi ts to local
communities through our philanthropic and volunteer activities (see the Society section of
this report). We also support brownfi eld remediation and development activities that add value
to local economies:
w Navistar invested more than $2.7 million in remediation of a site near our Springfi eld,
Ohio plant, and then, for a minimal sum, transferred the property to the City of Springfi eld
for redevelopment.
w Ongoing remediation of the former Wisconsin Steel Works site in southeastern Chicago,
once owned by Navistar, earned the “Good Neighbor Award” of the Southeast Environmen-
tal Task Force, an environmental advocacy group. Three cleaned-up parcels from the site
have already been sold for industrial reuse.
w Navistar is also managing the cleanup of a site in San Diego, California that the company
owned for 20 years before selling it in 1981 to Solar Turbines, a wholly owned subsidiary
of Caterpillar.
Navistar’s commitment to the communities in which we operate and where our employees and
their families live is aimed at sustainable growth, jobs, education and development.
How Navistar Adds Sustained Economic Value
Tim McDaniel, environmental, health and
safety manager, is one of the employee
volunteers who is helping to restore
wildlife habitats at Navistar facilities.
4201 Winfi eld Road
Warrenville, IL 60555
www.navistar.com
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