On June 21, 2012 NAV received a formal letter of inquiry from the United States Securities and Exchange Commission (“SEC”) requesting a number of categories of documents for the period of November 1, 2010 through the present relating to various accounting and disclosure issues.
Navistar International Corp said that on July 16, 2012, pursuant to a formal order of private investigation, it received a subpoena from the SEC requesting the same categories of documents sought via the informal inquiry.
Clearly AJ either doesn't understand warranty accounting, or else knowingly spread the financial impact out over several quarters instead of taking the pain all at once. Next shoe to drop: the writedown in value for all those Pro Stars with Max Force EGR engines, which are worth very little in the used truck market. And on top of their own used truck stocks, they can count on their customers coming back with their hands out for compensation once they realize just how little their trucks are now worth.
Meanwhile, Ustian is playing a lot of golf and enjoying retired life.