Supplier Score Card

1. Supplier Score Card

2. Dear Supplier: As part of the Navistar Engine Group long term strategy, we will continue to support our customers with great products, keep a very competitive cost structure and maintain sustainable growth. Suppliers play an important role in our strategy and are relied upon to provide quality product at the best cost with great technical support. Navistar recognizes flawless long-term strategy execution must be accompanied with an open and clear communication about challenges whereby the supply base can act to improve their support, quality and ensure they are meeting Navistar’s expectations. Suppliers currently have access to the Logistic Score Card which has been a great tool to monitor and measure supplier delivery performance. With the new Supplier Score Card System, suppliers will have Navistar feedback in three additional areas: Quality, Purchasing and Engineering. Quality score card will launch in this phase with Engineering and Purchasing score cards launching within the next few months. Navistar wants to monitor, measure and keep the best suppliers in its supply base. In addition, we want to recognize outstanding performance through the Diamond Supplier Award for those suppliers that exceed our expectations. We fully expect suppliers to meet or exceed Navistar’s expectations during the course of the relationship, which translates to a score of 91 points or above. In the next slides you will be familiarized with the Supplier Score Card and its categories, i.e. Logistic and Quality Score Cards. The presentation explains the Score Card rules for each category, evaluation frequency and important notes. Insert PowerPoint Presentation Name Here

3. Logistic Score Card

4. Logistic Score Card The Logistic Score Card was launched in 2003 to help Navistar consistently provide accurate, precise, timely and cost effective deliveries of materials to our manufacturing facilities. Currently, most of the supply base is familiar with the rules and how suppliers are scored. As the Supplier Score Card will incorporate all available Score Cards we want to reiterate the importance of the Logistic Score Card, rules and notes. The Engine suppliers are scored based on the categories : Order Shortages; Website Logins; Minimum/Maximum Violations; Packaging; Labeling; ASN Compliance and Transportation The table below identifies the categories, deductions per violation and max points deduction a supplier may experience. Navistar expects suppliers to keep their Logistic Score at 95 points or above overa three month average. The minimum expectation is an85 points rolling average for a three-month period. Consistent with our previous practice, Suppliers that perform below the minimum level will be debited a $2500 administrative charge per Plant location. Insert PowerPoint Presentation Name Here

5. Logistic Score Card • All notes below make reference to Logistic Score Card and Navistar Supplier Guideline: • Order Shortages 25 possible points; 5 point deduction per violation up to 25 points. • Plant orders from SMI that cannot be completed for full requirement (2.1.1). • Website Logins 20 possible points; 5 point deduction per violation up to 20 points. • Required to check appropriate SMI Logistics Provider website(s) each Navistar Engine Plant operating day (2.1.2). • Min/Max Violations 20 possible points; 2 point deduction per violation up to 20 points. • SMI levels fall below or above the established inventory levels (2.1). • Packaging 10 possible points; 1 point deduction per violation up to 10 points. • Adherence to Packaging Guidelines (4.1). • Labeling 10 possible points; 1 point deduction per violation up to 10 points. • Adherence to Labeling Guidelines (4.2; excluding 4.2.2). • ASN Compliance 10 possible points; 1 point deduction per violation up to 10 points. • Properly formatted and timely EDI 856 – ASN (1.1.5) andproper use of Quick Receive Label (4.2.2). • Transportation 5 possible points; 5 point deduction per violation up to 5 points. • Utilization of proper carrier (Element 3.0). Please refer to the Engine Group Supplier Guidelines, click on the link below for more information (http://evalue.internationaldelivers.com/supplier/Documents/DO000D01.pdf) or contact Mel Campbell at Mel.Campbell@navistar.com or (708) 865-3715. Navistar Property - Confidential

6. Quality Score Card

7. Quality Score Card Navistar is proud to present the Engine Quality Score Card and its rules. We fully expect suppliers to meet or exceed Navistar’s expectations during the course of the relationship, which translates to a score of 91 points or above. Furthermore, we expect suppliers to use the Navistar Scorecard information as part of their on-going continuous improvement program(s) to meet their TS/ISO certification requirements. Purpose: Navistar’s primary purpose for sharing this information is to educate/inform suppliers of quality concerns and trends. Navistar will also use this information as a factor for determining appropriate surveillance requirements for current and future products Evaluation : Every month the Engine Central Quality Managers will score suppliers based on key product quality metrics and timeliness of actions Suppliers will not receive debits for falling below a score of 91. However, quality scores will be used as a critical part of all sourcing decisions. Insert PowerPoint Presentation Name Here

8. Quality Score Card The table below identifies the categories, deductions causals and points deductions per violation. Please contact internationalscorecard@navistar.com in case of QualityScore Card questions or contact directly the Supplier Quality Engineer responsible who has been working with you. Insert PowerPoint Presentation Name Here