Case | HBS Case Collection | November 1994

Navistar International

by Stuart C. Gilson and Jeremy Cott

Abstract

As a consequence of laying off half its workforce in a massive downsizing program, the company--a large manufacturer of medium and heavy trucks--struggles with a huge ($2.6 billion) liability for retiree medical costs. Although the company has promised its retirees (and their families) full lifetime medical coverage, it must negotiate a substantial reduction in these benefits to avoid bankruptcy.

Keywords: Negotiation Process; Wages; Labor Unions; Legal Liability; Insolvency and Bankruptcy; Restructuring;

Citation:

Gilson, Stuart C., and Jeremy Cott. "Navistar International." Harvard Business School Case 295-030, November 1994.