Crain’s Headlines: Whistleblower Suit Claims Navistar ‘Wildly’ Inflated Prices

Illinois-based truck and engine maker Navistar is accused of bilking the Pentagon out of almost $1.5 billion. The federal government has joined a previously filed whistleblower lawsuit that alleges Navistar’s defense unit fraudulently jacked up prices for components of mine-resistant vehicles used widely by the military in Iraq and Afghanistan.

Navistar is accused of submitting misleading documents – including forged invoices and fabricated, inflated catalog prices – to induce the Pentagon to grant the company a multibillion-dollar contract. Top Navistar officials are alleged to have been aware of the scheme.

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In other Chicago-area news:

Ford and McDonald’s are launching a new program that will take coffee waste from the fast-food giant and convert it, believe it or not, into auto parts.

The automaker will use the so-called “chaff” – the dried coffee bean skin that falls off during roasting – to make headlamp housings. Ford plans to start the experiment with the Lincoln Continental line this month, but expects to add new vehicles – and applications besides headlamp housings – starting next year.

The partnership is expected to use a significant portion of the 62 million pounds of coffee chaff that McDonald’s North American operations trash each year.

And finally, in a move that’s stunned the brewing industry, liquor giant Constellation Brands is offloading one of its most recent acquisitions to a small brewery in north suburban Highwood.

Constellation, whose beer division is headquartered in Chicago, paid a billion dollars to purchase Ballast Point craft beer brand back in 2015, an eye-popping sum at the time. But less than two years after that deal, Constellation said Ballast wasn’t growing as expected, forcing its new parent to take an impairment charge.

Kings & Convicts Brewing Company is now the owner of Ballast Point and its roughly 560 employees. No word on how much the buyer paid, but Constellation most recently estimated the trademark’s fair market value at $17 million.

Crain’s Headlines is a joint production between WTTW and Crain’s Chicago Business. It airs every Monday through Thursday on the WTTW News program “Chicago Tonight.” 

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