International Harvester, the name and the company, are alive and well in Australia.
Although the U.S. parent had to change its name from International Harvester to Navistar when it sold its agricultural and construction equipment divisions, the Australian subsidiary has the right to retain the name until October 1990.It is part of the continuation of what the accountants describe as a scheme of arrangement that has enabled the company to survive near-bankruptcy and has been packaged to take it in a profit-earning condition into the 1990s and the 21st century.
Under the latest reorganization of the company that allowed the scheme of arrangement to continue, U.S. parent Navistar International Transport Corp. now owns only roughly one-third of its Australian offshoot.
The rest is owned by no less than 14 banks or merchant banks, most of them Australian.
Two of Australia's biggest banks, the government-owned Commonwealth Bank and the Australia and New Zealand Banking Group, between them own 24 percent.
The company is Australia's only truck manufacturer. It is the leader in the 7-ton and 10-ton payload segments of the country's truck market.
International Harvester Australia Ltd. was established in Australia in 1912 as a wholly owned subsidiary of the U.S. parent.
Its activities since then have embraced importing, manufacturing and distributing agricultural machinery, industrial engines, construction equipment and commercial vehicles.
It grew in tandem with the Australian economy, survived the depression of the 1930s and contributed significantly to the country's World War II manufacturing expansion.
A wholly owned subsidiary, International Harvester Credit Corp. was established to provide finance for distributors and customers.
But by 1981 the situation had soured dramatically for IHAL. It was no longer making profits. It had a liquidity problem. It was overloaded with trucks and other equipment which were not selling.
In 1982 a firm of accountants in the southern city of Melbourne were appointed receivers and managers. Liquidation of the company was feared.
But in 1983 a five-year scheme of arrangement was drawn up by the company, its bankers and creditors.
The recovery was as dramatic as the collapse. The company traded profitably during each of the five years.
Scheme of arrangement trustee David Crawford stated: What we see today is a company which in just five years has successfully restructured from what at the time was the most dramatic collapse in the history of the Australian manufacturing industry.
It has achieved this recovery by rationalizing its activities and adopting a style of management designed to generate profits and a strong cash flow, Mr. Crawford said.
The rationalization saw the sale of the company's agricultural business in 1986, which enabled the concentration of company resources on the development, manufacturing and sales of heavy-duty trucks, he added.
Part of the rationalization saw the conversion of 50 percent of the company's lender debt to equity for the lenders.