December 4, 2001

Navistar Reports Profitable Operations In Fourth Quarter;Events Relating To September 11 Contribute To Loss For Year

Despite Economic Slowdown, Truck And Engine Strategies Are On Track;

Goal Is To Be In Black In Fiscal 2002

WARRENVILLE, Ill. - December 4, 2001 - Navistar International Corporation (NYSE: NAV) today reported that it was profitable in the fourth quarter, with net income totaling $7 million or $0.11 per diluted common share. This compares favorably to the fourth quarter of 2000, when the company recorded a loss of $105 million, or $1.77 per diluted common share. Last year's loss resulted from a $190 million after tax restructuring charge. Excluding the 2000 restructuring charge, this year's fourth quarter results were $77 million lower than a year ago, a large portion of which was caused by the dramatic decline in truck industry volume. Consolidated sales and revenues for the fourth quarter of 2001 declined to $1.8 billion from $2.0 billion in 2000.

Fourth quarter results marked the third consecutive quarter in which the company operated profitably amidst a truck market that's even weaker than the 1990-91 industry wide downturn. Despite the positive results of the last three quarters, Navistar recorded a loss for the full year as industry heavy truck sales declined 37 percent in 2001 and Class 6-7 industry medium truck sales, including school bus sales, were down 24 percent.

John R. Horne, Navistar chairman, president and chief executive officer, said the company was on track through the end of August to show a net profit for the year, but the terrorist acts of September 11 dramatically impacted the overall economy and adversely affected company business operations.

"Despite the tough economy and an even tougher industry climate, in August we were on track to be profitable for the year." Horne said. "However the events of September 11 further weakened the economy and hampered our ability to get materials to our manufacturing sites on time, drove up costs and even caused some customers to defer orders."

Horne cited catering companies that provide food services for the airlines and consumer goods delivery companies as two examples of customers directly affected.

Consolidated sales and revenues for the year ended October 31, 2001 totaled $6.7 billion, compared with $8.5 billion a year earlier. The net loss for 2001 amounted to $23 million, equal to $0.39 per diluted common share, compared with net income of $159 million, or $2.58 per diluted common share in 2000.

"While we are disappointed with 2001's unfavorable market conditions and our financial results, the year was marked with significant accomplishments that build a solid foundation for the future," Horne said. "We launched new products, opened new plants and announced new partnerships that set the pace for the industry. Our truck and engine strategies are on track and we are positioned well for profitable growth in the future."

The company's trucks are sold under the Internationalâ brand. Market share in the United States and Canada was virtually unchanged at 26.3 percent. Worldwide shipments in 2001 totaled 89,600 trucks and buses, of which 43,700 were medium trucks, primarily Class 6-7; 20,800 were school buses; and 25,100 were heavy trucks (Class 8 GVW). Shipments in 2000 consisted of 124,900 trucks and buses of which 56,500 were medium trucks, 23,400 were school buses and 45,000 were heavy trucks.

Total worldwide engine shipments rose to 394,300 units, up slightly from 392,900 units in 2000. The increases in engine shipments resulted from the inclusion of shipments of 42,200 units from Maxion Motores. The company acquired the remaining 50 percent of Maxion Motores in January 2001 and was previously accounted for on an equity basis. Maxion Motores has been renamed International Engines South America. Without the inclusion of Maxion engines, engine shipments were down 40,800 units.

Navistar is forecasting United States and Canadian total truck industry retail sales volume in fiscal 2002 at 294,500 units, down 6 percent from the 312,700 units sold in the 12 months ended October 31, 2001. Demand for heavy trucks is expected to reach 154,000 units, while demand for medium trucks is estimated at 112,500 units, of which 87,500 are Class 6-7, with school bus demand forecast at 28,000 units.

Significantly, because industry inventories have been reduced by approximately 33,500 units this year, industry production should increase to 294,500 units in 2002 from 279,200 units if retail industry conditions do not get worse.

Horne emphasized that the company will continue to focus on greater profitability and lower breakeven levels at the bottom of the cycle.

"The truck market in North America remains weak and this trend is expected to continue for at least another 12 months," Horne said. "Pricing on new and used trucks remains soft and will remain a challenge for the industry. We believe International is in a better inventory position than competitors, and our new high performance medium truck line should increase our appeal to segments of the market for which life-cycle value takes on more importance in a tough economic climate."

Horne also noted that the sale of its Harco National Insurance Company to IAT Reinsurance Syndicate Ltd. was finalized on November 30. Plans to sell the wholly owned subsidiary were announced with the 2000 restructuring.

Navistar International Corporation (NYSE: NAV) is the parent company of International Truck and Engine Corporation, a leading producer of mid-range diesel engines, medium trucks, school buses, heavy trucks, severe service vehicles, and parts and service sold under the Internationalâ brand. The company also is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. Additionally, the company, through a joint venture with Ford Motor Company, will build medium commercial trucks and currently sells and services truck and diesel engine parts. International Truck and Engine has the broadest distribution network in the industry. Financing for customers and dealers is provided through a wholly owned subsidiary. Additional information can be found on the company's web site at .

Forward Looking Statements

Statements contained in this news release that are not purely historical are forward -looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the company's expectations, hopes, beliefs and intentions on strategies regarding the future. It is important to note that the company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including but not limited to general economic, business and financing conditions, labor relations, governmental action, competitor pricing activity, expense volatility, and other risks detailed from time to time in Navistar's Securities and Exchange Commission filings. Navistar assumes no obligation to update the information included in this release.

The company's conference call with security analysts to discuss the earnings report will be webcast at 10 a.m. CST today. The webcast can be accessed via the Internet at Additional information can be found at, via the Financial and Investor Information link to the Overview page.

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