International Harvester and Renault yesterday announced an agreement to jointly develop common agricultural tractor components in Europe.
The agreement with the French auto maker, approved by the French Industry Ministry and expected to be signed today in Paris, will reduce production costs and improve quality and performance of major tractor components, Harvester said.
"I believe this agreement will permit major advances in agricultural tractor design, performance and durability within a surprisingly short period of time," said Jack D. Rutherford, Harvester president and chief operating officer.
Renault and Harvester, which is based in Chicago, plan to set up a joint investment unit in which each company will have a 40 percent interest. The remaining 20 percent will be put up by banks and other investors. The company will be responsible for purchasing industrial assets and subsequently leasing them to the two partners.
The accord also calls for setting up a joint subsidiary that will draw up a calendar for cooperation between the two groups and provide research and other services. The pact covers joint research and development activities, establishment of a common sourcing and purchasing policy and the potential manufacture by the partners of common components in Europe.
It will have no effect on the independence of product lines of the two firms or their separate dealer networks.