WARRENVILLE, ILL. – (June 21, 2011) – Navistar, Inc. has been awarded a development contract by the United States Postal Service (USPS) under which Navistar will engineer a diesel powertrain replacement for USPS delivery vehicles. Navistar’s re-powered diesel vehicle effort is designed to significantly reduce the escalating service and fuel costs associated with the USPS’s aging fleet.

Under terms of the contract, the USPS will deliver one of its Long Life Vehicles (LLV) to Navistar Engine Group’s Engineering and Technical Center in Melrose Park, Illinois, where the company’s in-house re-power engineering department will develop, install and test a diesel powertrain that features Navistar’s MaxxForce® 3.2-liter turbodiesel engine. Financial terms were not disclosed.

“When the USPS current fleet was first put into service, diesel fuel and advanced diesel powertrain technology were not widely available,” said Andrew Dondlinger, vice president, North America operations, Navistar Engine Group. “Now, by replacing its gasoline powertrains, USPS could realize diesel’s benefits of fuel efficiency, long operational life and low service and operating costs.”

A proven diesel re-power solution could be used to upgrade USPS vehicles over the next decade. It is not uncommon for diesel powertrains to achieve fuel economy gains of up to 35 percent when compared to gasoline powertrains. Further savings would be gained from diesel’s lower maintenance requirements, longer service life, and overall lower cost of ownership. Navistar estimates the USPS could realize payback on each re-powered vehicle in as little as two years depending on maintenance and fuel costs.

Beyond Navistar’s history of development work on USPS diesel re-power, the company’s reputation as an integrated truck and engine manufacturer and its proven capabilities for on-time, on-budget work for the U.S. military also influenced the contract award.