Could Navistar's Financial Woes Affect Security of U.S. troops?

The automaker Navistar is currently in dire straits, fending off activist investors as some analysts wonder if the company is going backrupt. Its problems began with a ruling by the U.S. Court of Appeals, stating Navistar had to redesign its engines in order to meet 2010 EPA emissions guidelines.  

But if Navistar, America's third-largest truck engine-maker, goes under its loss will be more than a loss to the U.S. auto industry.  Navistar is also an important supplier to the U.S. military, selling vehicles and equipment that protect U.S. troops from insurgent landmines and anti-tank weapons known as rocket propelled grenades (RPGs).  

Earlier this month, Navistar received a $59 million contract to deliver 1,357 RPG net kits for International® MaxxPro® Mine Resistant Ambush Protected (MRAP) units in Afghanistan.  The contract is considered an urgent buy. 

The nets are intended to provide additional protection from RPGs for MRAP units, a large and heavily armored V-shaped tank that Navistar designed to protect U.S. troops from landmines and imporvished explosive devices (IEDs).  IEDs are the weapon of choice for enemy insurgents in Afghanistan.  

Delivery of the mine kits is scheduled to begin in August and to be completed in December of this year.

"Five years ago, almost to the day, we received our first MaxxPro contract to support the urgent operational need in Iraq," said Archie Massicotte, president, Navistar Defense, in a company statement.  "We always strive to anticipate the needs of our warfighters and deliver on all contracts with the same urgency asked of us in 2007. We are proud to provide integrated solutions, such as the RPG nets, to our Armed Forces and we will continue to develop new solutions to meet the changing needs of the warfighter." 

According to congressional reports, the MRAP provides four to five times more protection for U.S. troops than traditional armored Humvees.

It remains to be seen if Navistar's current financial troubles will affect deliver of MaxxPro RPG nets or MRAP armored vehicles to U.S. troops in Afghanistan.