NAVISTAR <NAV> SEES HIGHER CAPITAL SPENDING
Navistar International Corp expects its
fiscal 1987 capital spending to rise to 100 mln dlrs, up from
74 mln dlrs a year ago, Chairman-elect James Cotting told
reporters after the annual meeting.
    Cotting said much of the spending will go toward
modernization of the company''s painting operations at its
Springfield, Ohio truck assembly plant. The balance will be
used to increase productivity at its various facilities.
    In answer to a question, Neil Springer, who on April 1
becomes chairman of the company's new truck and engine holding
company, Navistar International Transportation Corp, said the
company's goal is to reduce costs 25 pct by 1990.
    Noting that purchased material now accounts for 81 pct of
its cost of production, Springer said Navistar intends to enter
similar relationships to one it has with Dana Corp <CDN>, in
which the two companies are coordinating design, manufacture,
distribution and service of components to cut costs.
    Springer said because of overcapacity in some sectors,
price discounting will continue to plague the truck
manufacturing industry.
    He said the heavy truck industry is operating at 65 pct of
capacity, up 10 pct from a year ago with medium truck operating
at 73 pct of capacity, about level with a year ago.
    Springer said Navistar itself is operating at "over 70 pct
of capacity" in heavy trucks and at more than 90 pct in medium
trucks.
    Asked when Navistar would begin making acquisitions,
Springer said "We're ready now, but we have no specific
timetable."
    Earlier, at the annual meeting, stockholders gave a
standing ovation to retiring Chairman Donald Lennox, who during
an eight-year tenure was cited for redirecting the company
toward profitability. Lennox told reporters he was assuming
chairmanship of privately held Schlegel Corp, Rochester, N.Y.
He said he hoped to take the 100-year-old manufacturer with 300
mln dlrs in sales public within two years.
 Reuter
