UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 11-K


(Mark One)

         [ X ]    ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]


For the fiscal year end December 31, 1998

                                       OR


         [   ]    TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]


For the transition period from       to
                               -----    -----

Commission file number 1-9618



                   NAVISTAR INTERNATIONAL TRANSPORTATION CORP.
                         401(k) RETIREMENT SAVINGS PLAN
                         ------------------------------
                            (Full Title of the Plan)




                       NAVISTAR INTERNATIONAL CORPORATION
                       ----------------------------------
                         455 North Cityfront Plaza Drive
                             Chicago, Illinois 60611

                 (Name of Issuer of the securities held pursuant
         to the plan and the address of its principal executive office)


<PAGE>


     PAGE 2


                              REQUIRED INFORMATION


         Navistar  International  Transportation Corp. 401(k) Retirement Savings
Plan ("Plan") is subject to the Employee  Retirement Income Security Act of 1974
("ERISA"). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the
financial statements and schedules of the Plan as of December 31, 1998 and 1997,
and for the years then ended,  which have been prepared in  accordance  with the
financial reporting requirements of ERISA, are attached hereto as Appendix 1 and
incorporated herein by this reference.


                                    EXHIBITS
                                    --------


Exhibit Number                Description                            11-K Page
--------------                -----------                            ---------

      23                      Consent of Deloitte & Touche LLP          E-1


                                   SIGNATURES


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the Plan  Administrator  for the Plan has duly caused  this annual  report to be
signed on the Plan's behalf by the undersigned hereunto duly authorized.



                              Navistar International Transportation Corp.
                              -------------------------------------------
                                    401(k) Retirement Savings Plan
                                    ------------------------------

                                        By:  /s/ Mark T. Schwetschenau
                                             -------------------------
                                        Name:    Mark T. Schwetschenau
                                        Title:   Member, Navistar International
                                                 Transportration Corp.
                                                 Pension Fund Investment
                                                 Committee


                                                 June 2, 1999


<PAGE>


                                                                      APPENDIX 1

NAVISTAR INTERNATIONAL TRANSPORTATION CORP.
401(k) RETIREMENT SAVINGS PLAN
------------------------------


    TABLE OF CONTENTS                                                     Page
    -----------------                                                     ----

    INDEPENDENT AUDITORS' REPORT                                            1

    FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998 AND 1997
    AND FOR THE YEARS THEN ENDED:
       Statements of Net Assets Available for Benefits                      2
       Statements of Changes in Net Assets
          Available for Benefits                                            3
       Notes to Financial Statements                                       4-9


    SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1998 AND
    FOR THE YEAR THEN ENDED:
       Schedule of Assets Held for Investment Purposes - Item 27(a)         10
       Schedule of Reportable Transactions - Item 27(d)                     11




    All other  schedules  are omitted  because of the absence of the  conditions
    under which they are required.

--------------------------------------------------------------------------------


<PAGE>


INDEPENDENT AUDITORS' REPORT

Navistar International Transportation Corp:

We  have  audited  the  accompanying   financial   statements  of  the  Navistar
International  Transportation  Corp. 401(k) Retirement Savings Plan (the "Plan")
as of December  31, 1998 and 1997,  and for the years then ended,  listed in the
table of contents.  These  financial  statements are the  responsibility  of the
Plan's  management.  Our  responsibility  is to  express  an  opinion  on  these
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,  the net assets  available for benefits of the Plan as of December 31,
1998 and 1997,  and the changes in net assets  available  for  benefits  for the
years then ended, in conformity with generally accepted accounting principles.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying  supplemental  schedules
listed in the table of contents are presented for purposes of complying with the
Department of Labor's Rules and Regulations  for Reporting and Disclosure  under
the Employee  Retirement Income Security Act of 1974 and are not a required part
of the basic financial statements. These schedules are the responsibility of the
Plan's  management.  Such  supplemental  schedules  have been  subjected  to the
auditing procedures applied in the audit of the basic 1998 financial  statements
and, in our opinion,  are fairly stated in all material respects when considered
in relation to the basic 1998 financial statements taken as a whole.


DELOITTE & TOUCHE LLP
May 14, 1999
Chicago, Illinois


                                     - 1 -


<PAGE>


NAVISTAR INTERNATIONAL TRANSPORTATION CORP.
401(k) RETIREMENT SAVINGS PLAN
------------------------------

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998 AND 1997
--------------------------------

ASSETS                                                   1998          1997
                                                         ----          ----
INVESTMENTS:

Navistar Pooled  Stock
  Master  Trust Fund -
  at market  value  (1998 - 1,062,453 units of
  participation, cost $7,819,170 and 1997
  - 697,325 units of participation,
  cost $5,428,589)                                  $  7,968,396    $  4,588,397
American Express Trust
  Collective Income Fund II -
  at market value (1998 -  2,565,675 shares,
  cost $40,057,667 and 1997 - 2,570,366 shares,
  cost $38,762,716)                                   47,317,982      44,709,382
American Express Trust Equity Index Fund -
  at market value (1998 - 1,529,383 shares,
  cost $25,998,610 and 1997 - 1,470,875 shares,
  cost $21,348,377)                                   53,552,854      40,084,274
IDS Selective Fund (Y) -
  at market value (1998 -  1,000,500 shares,
  cost $9,243,540 and 1997 - 767,551  shares,
  cost $7,075,797)                                     9,278,637       7,046,114
IDS New Dimensions Fund (Y) -
  at market value (1998 - 2,892,064 shares,
  cost $53,335,626 and 1997 - 2,786,925 shares,
  cost  $46,516,206)                                  83,421,578      66,501,616
Templeton Foreign Fund -
  at market value (1998 -  760,239 shares,
  cost $7,458,335 and 1997 - 769,713 shares,
  cost $7,761,131)                                     6,378,401       7,658,640
Participant loans                                      4,121,487       3,987,776
                                                    ------------    ------------

      Total investments                              212,039,335     174,576,199

RECEIVABLES:

Participant pre-tax contributions                        469,271         552,738
Participant after-tax contributions                       11,331           8,302
                                                    ------------    ------------

      Total receivables                                  480,602         561,040
                                                    ------------    ------------

NET ASSETS AVAILABLE FOR BENEFITS                   $212,519,937    $175,137,239
                                                    ============    ============

See notes to financial statements.

--------------------------------------------------------------------------------


                                     - 2 -


<PAGE>


NAVISTAR INTERNATIONAL TRANSPORTATION CORP.
401(k) RETIREMENT SAVINGS PLAN
-------------------------------------------

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
----------------------------------------------

                                                         1998            1997
                                                         ----            ----
ADDITIONS TO NET ASSETS:
Investment income:
  Net realized/unrealized appreciation
    in fair value of investments                   $  28,202,593   $  22,076,270
  Interest and dividend income                         6,427,505       6,574,937
                                                    ------------    ------------
      Total investment income                         34,630,098      28,651,207

Participant contributions:
  Pre-tax contributions                               14,528,937      12,292,840
  After-tax contributions                                209,626         196,762
                                                    ------------    ------------
      Total participant contributions                 14,738,563      12,489,602

Rollovers from other qualified plans                     104,540         192,400
Transfers from other qualified plans - net               612,268               -
                                                    ------------    ------------
      Total additions to net assets                   50,085,469      41,333,209
                                                    ------------    ------------

DEDUCTIONS FROM NET ASSETS:
Benefits paid to participants                         12,702,771       8,575,373
Transfers to other qualified plans - net                       -         787,001
                                                    ------------    ------------
      Total deductions from net assets                12,702,771       9,362,374
                                                    ------------    ------------
      Net increase                                    37,382,698      31,970,835


NET ASSETS AVAILABLE FOR BENEFITS:
  BEGINNING OF YEAR                                  175,137,239     143,166,404
                                                    ------------    ------------

  END OF YEAR                                       $212,519,937    $175,137,239
                                                    ============    ============

See notes to financial statements.

--------------------------------------------------------------------------------


                                     - 3 -


<PAGE>


NAVISTAR INTERNATIONAL TRANSPORTATION CORP.
401(k) RETIREMENT SAVINGS PLAN
------------------------------


NOTES TO FINANCIAL STATEMENTS FOR THE YEARS
ENDED DECEMBER 31, 1998 AND 1997
--------------------------------

 1.      DESCRIPTION OF THE PLAN

         The following description of the Navistar International  Transportation
         Corp. 401(k) Retirement Savings Plan (the "Plan") provides only general
         information.  Participants  should  refer  to the Plan  document  for a
         complete description of the Plan's provisions.

         General   -  The   Plan  is   sponsored   by   Navistar   International
         Transportation  Corp. (the "Company") to provide savings and retirement
         benefits for certain eligible salaried  employees of the Company and of
         certain of its affiliates who are participating under the Plan who meet
         certain  length  of  service  requirements.  The Plan  was  established
         February 1, 1965,  and has  subsequently  been  restated and amended to
         maintain  qualification  under Sections  401(a),  401(k) and 501 of the
         Internal Revenue Code of 1986 (the "Code") and to modify the provisions
         of the Plan.  Administrative  expenses relating to the Plan are paid by
         the  Company.  The Plan is subject to the  provisions  of the  Employee
         Retirement Income Security Act of 1974 ("ERISA").

         The Trustee,  American  Express Trust, is authorized to hold and invest
         the assets of the Plan in accordance  with the  provisions of the Trust
         Agreement between the Company and the Trustee.

         In  general,  participation  in this plan is limited to those  eligible
         salaried  employees of the Company  whose initial date of hire is prior
         to January 1,  1996,  and to  eligible  salaried  employees  of certain
         affiliates.

         Contributions  -  Contributions  may be made to the  Plan on a  pre-tax
         basis,  an after-tax  basis,  or a combination of both.  Pre-tax salary
         reduction  contributions  to the Plan are  subject  to  annual  maximum
         limits  equal to the  lesser of 25 percent  of a  participant's  annual
         compensation  or a  prescribed  dollar  amount,  indexed for  inflation
         ($10,000 for 1998, and $9,500 for 1997).  After-tax  contributions  are
         subject to annual maximum limits of 15 percent of annual  compensation.
         Both pre-tax and  after-tax  contributions  may be elected at a minimum
         level of one percent of eligible  compensation at any time.  Subject to
         Company  approval,  certain  eligible  employees  are  allowed  to make
         rollover  contributions  to the  Plan,  if such  contributions  satisfy
         applicable   regulations.   Such  employees  are  not  required  to  be
         participants  for  any  other  purpose  than  their  rollover  account;
         however,  neither after-tax  contributions nor pre-tax salary reduction
         contributions  may be made  until  such  time as  such  employee  would
         otherwise become eligible to and does elect  participation in the Plan.
         The  Plan  permits  the  Company  to make  matching  and  discretionary
         contributions.

         Vesting - Company matching and discretionary  contributions are subject
         to  a  vesting  schedule  based  upon  the   participant's   length  of
         employment, and fully vest upon completion of five years of service.

         Non-vested   Company  matching   contributions  are  forfeited  when  a
         participant retires or terminates service. Such forfeitures are used to
         offset future Company  contributions.  Salary reduction  contributions,
         employee after-tax  contributions and rollover  contributions are fully
         vested   immediately.   The  Company  did  not  make  any  matching  or
         discretionary contributions to the Plan during the years ended December
         31, 1998 and 1997.


                                     - 4 -


<PAGE>


1.       DESCRIPTION OF THE PLAN (continued)

         Investment  Options -  Participants  may direct the investment of their
         account assets as follows:

         o    American Express Trust Collective  Income Fund II is  a collective
              investment fund which invested in a diversified pool of investment
              contracts  varying in maturity date, size and yield and short-term
              cash instruments.

         o    American   Express  Trust  Equity  Index  Fund   is  a  collective
              investment fund which invested primarily in nearly all of the same
              stocks as are in the Standard & Poor's 500 stock index.

         o    IDS Selective Fund (Y) is  a mutual fund which invested  primarily
              in investment grade corporate bonds,  government  bonds, and other
              debt securities.

         o    IDS  New  Dimensions  Fund (Y) is a  mutual  fund  which  invested
              primarily in common stocks of United States companies.

         o    Templeton  Foreign Fund is a mutual fund which invested  primarily
              in common stocks and other securities of companies and governments
              outside the United States.

         o    Navistar  International  Corporation  Common Stock  Pooled Fund is
              a pool consisting primarily of Navistar International  Corporation
              Common  Stock and a small amount of short-term  cash  investments.
              Navistar International  Corporation  ("Navistar")  is  the  parent
              of  the Company.

              The shares of Navistar International  Corporation and the units of
              a money market fund are pooled in a master  trust and  represented
              by units of the  Navistar  Stock Pool (the  "Pool").  The value of
              each unit of the Pool is represented in terms of "net asset value"
              ("NAV").  The NAV per unit of the Pool is  determined  by dividing
              the  value  of all  assets  of the  Pool by the  total  number  of
              outstanding units of the Pool.

              The plans  participating  in the Master  Trust Fund are  allocated
              units of the Pool based on their  respective  percent interest and
              share in the assets of the Pool,  investment  income  generated by
              assets of the Pool, and the gains/losses of the assets of the Pool
              by way of the  increase/decrease  of the NAV of each participating
              plan's allocated units of the Pool. Except that each participating
              plan may hold a  different  number  of  units  of the  Pool,  each
              participating  plan  shares  equally in the assets and  investment
              experience  of the Pool since the same NAV applies to all units of
              the Pool.

              The participating plans in the Master Trust Fund and their percent
              interest as of December 31, 1998 are as follows:

                   Navistar International Transportation Corp.
                   401(k) Retirement Savings Plan                     70.2%

                   Navistar International Transportation Corp.
                   401(k) Plan for Represented Employees              25.9%

                   Navistar Retirement Accumulation Plan               3.9%


                                     - 5 -


<PAGE>


1.       DESCRIPTION OF THE PLAN (continued)

         The following  table  presents the carrying value of investments of the
         Master Trust Fund as of December  31, 1998 and 1997 and the  components
         of investment income for the two years then ended.

                                                         1998            1997
                                                         ----            ----

           Cash and cash equivalents                 $   176,042     $   148,796
           Navistar International Corporation
             Common Stock                             11,177,596       5,338,075
                                                     -----------     -----------
           Total investments                         $11,353,638     $ 5,486,871
                                                     ===========     ===========

           Net realized/unrealized appreciation
             in fair value of investments            $ 1,298,552     $ 2,176,820
           Interest and dividend income                   14,174           5,081
                                                     -----------     -----------
           Total investment income                   $ 1,312,726     $ 2,181,901
                                                     ===========     ===========

         Participant Accounts - Contributions and assets allocated to a specific
         investment fund are commingled with those of other participants and are
         invested in accordance with the nature of the specific fund.

         Realized gains and losses,  unrealized  appreciation and  depreciation,
         and dividends and interest are allocated to participants based on their
         proportionate  share of the funds.  Fund  managers' fees are charged to
         participants'  accounts  as a  reduction  of the return  earned on each
         investment option.

         Loans to  Participants  -  Participants  may  borrow  from  their  fund
         accounts a minimum  of $1,000 up to the  lesser of 50% of their  vested
         account balance or $50,000. Loan transactions are treated as a transfer
         between the applicable  investment  funds and the loan fund. Loan terms
         range  from 1 to 5 years,  with  the  exception  of loans  made for the
         purchase of a principal residence, which must be repaid in installments
         over a period of up to ten years.  The loans are secured by the balance
         in the  participant's  account and bear interest at a rate commensurate
         with local prevailing rates as determined by the Plan Administrator.

         Payment of Benefits - Participants  may request either an in-service or
         hardship  withdrawal of certain of their account assets.  An in-service
         withdrawal  may be  made  for a  portion  of the  value  of the  assets
         purchased with the participants' after-tax contributions and investment
         earnings  thereon.  Participants may only withdraw  authorized  pre-tax
         salary  reduction  contributions  after  attaining age 59-1/2,  or on a
         hardship  basis prior to  attaining  age 59-1/2.  Company  matching and
         discretionary  contributions  and investment  earnings  thereon are not
         eligible for in-service withdrawal.

         A  participant's   vested  account  is  distributable  at  the  time  a
         participant  separates  from service with the Company,  suffers a total
         and  permanent  disability  or dies.  When the  participant  terminates
         employment,  the vested  portion of the account will be  distributed if
         the  asset  value is $5,000  or less.  If the asset  value is more than
         $5,000,  the  participant  has the option of receiving the account upon
         separation  or deferring  receipt until no later than April 1 following
         the year in which the participant becomes age 70-1/2 if the participant
         terminated  employment  prior  to  April  1,  1992,  or  age  65 if the
         participant  terminated  employment on or after April 1, 1992. Accounts
         are  distributed  in a single sum. If the account  includes 100 or more
         shares of Navistar  Common Stock,  the  distribution of that portion of
         the account will be made in the form of full shares of Common Stock and
         a cash payment for any fractional  shares.  For accounts with less than
         100 shares of Navistar Common Stock, the  distribution  will be made in
         cash.


                                     - 6 -


<PAGE>


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Basis  of  Presentation  - The  financial  statements  of the  Plan are
         presented on the accrual basis of accounting.

         Use  of  Estimates  -  The  preparation  of  financial   statements  in
         conformity  with  generally  accepted  accounting  principles  requires
         management to make estimates and  assumptions  that affect the reported
         amounts of assets and liabilities  and disclosure of contingent  assets
         and  liabilities  at the  date  of the  financial  statements  and  the
         reported amounts of revenues and expenses during the reporting  period.
         Actual results could differ from those estimates.

         Investment  Valuation  & Income  Recognition  -  Participant  loans are
         valued at cost which  approximates  market value. All other investments
         are presented at published  market values.  Security  transactions  are
         accounted  for on the trade  date.  Dividend  income is  accrued on the
         ex-dividend date.

         Unrealized appreciation or depreciation on investments is determined by
         comparing  the  fair  value  of these  separate  funds  at the  current
         year-end,   net  of  contributions  made  during  the  year,  to  their
         respective  fair values at the preceding  year-end.  Realized  gains or
         losses are determined by comparing net sales proceeds to the fair value
         of the investment at the preceding year-end.

         Participant  Withdrawals  - As of December  31, 1998 and  December  31,
         1997, there were no benefits which were due to former  participants who
         have withdrawn from  participation  in the Plan.  Benefits are recorded
         when paid.

3.       TAX STATUS OF THE PLAN

         The  Internal  Revenue  Service  has issued a  favorable  determination
         letter,  dated April 1996,  that the Plan, as then designed,  qualified
         under Sections 401(a) and 401(k) of the Code. The Company believes that
         the Plan is currently  designed and being  operated in compliance  with
         the applicable  requirements  of the Code and thus the Plan and related
         trust are exempt from federal  income taxes under Section 501(a) of the
         Code as of the financial  statement date.  Therefore,  no provision for
         income taxes is included in the Plan's financial statements.

4.       AMENDMENT OR TERMINATION OF THE PLAN

         Although  the Company  expects to continue the Plan  indefinitely,  the
         Company,  at its  discretion,  reserves  the  right to  amend,  modify,
         suspend or  terminate  the Plan,  provided  that no such  action  shall
         deprive any person of any rights to contributions  made under the Plan.
         If the Plan is terminated or contributions thereto have been completely
         discontinued, the rights of all participants to the amounts credited to
         their  accounts  shall  be  non-forfeitable  and the  interest  of each
         participant in the funds will be distributed to such participant or his
         or her  beneficiary in accordance with the Plan terms and ERISA. If the
         Plan is terminated,  Plan  participants will become fully vested in any
         funds allocated to them.

 5.      INVESTMENTS EXCEEDING 5 PERCENT OF NET ASSETS

         The Plan's investments which exceeded 5 percent of net assets available
         for benefits as of December 31, 1998 and 1997 are as follows:

                                                         1998            1997
                                                         ----            ----
         American Express Trust
           Collective Income Fund II                 $47,317,982     $44,709,382
         American Express Trust
           Equity Index Fund                          53,552,854      40,084,274
         IDS New Dimensions Fund (Y)                  83,421,578      66,501,616


                                     - 7 -


<PAGE>


6.         BY FUND INFORMATION

           Investment income,  participant pre-tax and after-tax  contributions,
           benefits  paid  to  participants  and  transfers  to and  from  other
           qualified plans, by separate  investment fund, are as follows for the
           years ended December 31, 1998 and 1997.
                                                        1998            1997
                                                        ----            ----

           Net realized/unrealized appreciation
            (depreciation) in fair value
            of investments:
              Navistar Pooled Stock
                Master Trust Fund                  $    857,759     $ 2,077,554
              American Express Trust
                Collective Income Fund II             2,718,332       2,610,537
              American Express Trust
                Equity Index Fund                    11,808,919       9,613,902
              IDS Selective Fund (Y)                     65,436          53,844
              IDS New Dimensions Fund (Y)            13,812,880       8,110,168
              Templeton Foreign Fund                 (1,060,733)       (389,735)
                                                    -----------     -----------
           Total                                    $28,202,593     $22,076,270
                                                    ===========     ===========

           Interest and dividend income:
              Navistar Pooled Stock
                Master Trust Fund                   $     5,377      $     4,349
              American Express Trust
                Collective Income Fund II                81,068           78,096
              American Express Trust
                Equity Index Fund                        81,235           65,753
              IDS Selective Fund (Y)                    591,549          486,359
              IDS New Dimensions Fund (Y)             4,945,060        5,084,340
              Templeton Foreign Fund                    723,216          856,040
                                                    -----------      -----------
           Total                                    $ 6,427,505      $ 6,574,937
                                                    ===========      ===========

           Participant pre-tax contributions:
              Navistar Pooled Stock
                Master Trust Fund                   $   178,680      $    39,238
              American Express Trust
                Collective Income Fund II             2,887,088        2,704,078
              American Express Trust
                Equity Index Fund                     3,695,643        2,710,910
              IDS Selective Fund (Y)                  1,017,015          855,205
              IDS New Dimensions Fund (Y)             5,635,617        4,861,542
              Templeton Foreign Fund                  1,114,894        1,121,867
                                                    -----------      -----------
           Total                                    $14,528,937      $12,292,840
                                                    ===========      ===========

           Participant after-tax contributions:
              Navistar Pooled Stock
                Master Trust Fund                   $     2,894      $       500
              American Express Trust
                Collective Income Fund II                52,615           56,882
              American Express Trust
                Equity Index Fund                        42,395           37,196
              IDS Selective Fund (Y)                     30,203           11,635
              IDS New Dimensions Fund (Y)                65,120           67,712
              Templeton Foreign Fund                     16,399           22,837
                                                    -----------      -----------
           Total                                    $   209,626      $   196,762
                                                    ===========      ===========


                                     - 8 -


<PAGE>


6.  BY FUND INFORMATION (continued)
                                                        1998            1997
                                                        ----            ----
           Benefits paid to participants:
              Navistar Pooled Stock
                Master Trust Fund                   $   106,327      $    45,494
              American Express Trust
                Collective Income Fund II             4,385,829        3,971,537
              American Express Trust
                Equity Index Fund                     3,087,199        1,440,639
              IDS Selective Fund (Y)                    744,131          384,749
              IDS New Dimensions Fund (Y)             3,892,330        2,212,078
              Templeton Foreign Fund                    369,877          365,578
              Participant loans                         117,078          155,298
                                                    -----------      -----------
           Total                                    $12,702,771      $ 8,575,373
                                                    ===========      ===========

           Transfers from (to) other
             qualified plans - net:
              Navistar Pooled Stock
                Master Trust Fund                   $     1,427      $  (84,929)
              American Express Trust
                Collective Income Fund II                70,321        (232,201)
              American Express Trust
                 Equity Index Fund                      125,280        (175,078)
              IDS Selective Fund (Y)                     40,941          (6,531)
              IDS New Dimensions Fund (Y)               256,862        (243,717)
              Templeton Foreign Fund                     79,817         (23,118)
              Participant loans                          37,620         (21,427)
                                                    -----------      -----------
           Total                                    $   612,268      $ (787,001)
                                                    ===========      ===========


                                     - 9 -


<PAGE>
<TABLE>
<CAPTION>
NAVISTAR INTERNATIONAL TRANSPORTATION CORP.
401(k) RETIREMENT SAVINGS PLAN
------------------------------

SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - ITEM 27(a), DECEMBER 31, 1998
-------------------------------------------------------------------------------

                                                              DESCRIPTION OF INVESTMENT,
                                                              INCLUDING MATURITY DATE,
       IDENTITY OF ISSUE, BORROWER,                           RATE OF INTEREST, COLLATERAL,
(1)    LESSOR OR SIMILAR PARTY                                PAR OR MATURITY VALUE                         COST        MARKET VALUE
---    -------------------------------------------------      --------------------------------------        ----        ------------
<S>    <S>                                                    <S>                                      <C>              <C>
 *     Navistar Pooled Stock Master Trust Fund                1,062,453  units of participation        $  7,819,170     $  7,968,396

       American Express Trust Collective Income Fund II       2,565,675  shares of beneficial
                                                                interest, collective investment fund     40,057,667       47,317,982

       American Express Trust Equity Index Fund               1,529,383 shares of beneficial
                                                                interest, collective investment fund     25,998,610       53,552,854

       IDS Selective Fund (Y)                                 1,000,500 shares of beneficial
                                                                interest, mutual fund                     9,243,540        9,278,637

       IDS New Dimensions Fund (Y)                            2,892,064 shares of beneficial
                                                                interest, mutual fund                    53,335,626       83,421,578

       Templeton Foreign Fund                                 760,239 shares of beneficial
                                                                interest,  mutual fund                    7,458,335        6,378,401

       Participant Loans                                      Interest rates ranging
                                                                from 6.67% - 10.30%,                      4,121,487        4,121,487
                                                                (maturing 1999 through 2008)           ------------     ------------

         TOTAL INVESTMENTS                                                                             $148,034,435     $212,039,335
                                                                                                       ============     ============
<FN>
(1)   An asterisk indicates a party-in-interest.
</FN>
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</TABLE>


                                     - 10 -


<PAGE>
<TABLE>
<CAPTION>
NAVISTAR INTERNATIONAL TRANSPORTATION CORP.
401(k) RETIREMENT SAVINGS PLAN
------------------------------
SCHEDULE OF REPORTABLE TRANSACTIONS - ITEM 27(d) YEAR ENDED DECEMBER 31, 1998
------------------------------------------------------------------------------------------------------------------------------------


Single Transactions  Exceeding 5% of Value - No transactions  qualified for this section.
Series  of  Transactions  with  the  Same  Broker  Exceeding  5% of  Value  - No transactions qualified for this section.
Series of Transactions in Same Security Exceeding 5% of Value:

                                                                 Number        Number
                                      Description                 of            of
     Identity of Issue                  of Asset               Purchases       Sales      Purchases          Sales        Net Gain
--------------------------      ---------------------------    ---------       ------     ---------          -----        ---------
<S>                             <S>                                <C>          <C>      <C>             <C>             <C>
IDS New Dimensions Fund (Y)     Mutual Fund                        107                   $13,373,016

IDS New Dimensions Fund (Y)     Mutual Fund                                     146                      $10,269,533     $3,712,334

American Express Trust
  Collective Income Fund II     Collective Investment Fund         100                    8,742,005

American Express Trust
  Collective Income Fund II     Collective Investment Fund                      120                        8,849,509      1,402,458

American Express Trust
  Equity Index Fund             Collective Investment Fund         106                    7,347,692

American Express Trust
  Equity Index Fund             Collective Investment Fund                      118                        5,688,029      2,990,573

<FN>
Note:  The above list of  reportable  transactions,  provided  by American Express Trust, was  determined  by comparing  the current
       value of the transactions,   or  series  of  transactions,  on  the  transaction date(s), with 5 percent of the current value
       of the Trust assets at the  beginning  of  the  Plan  year;  and, as such, may include transactions which represent 5 percent
       of the assets of the Trust, but may not  represent  transactions  which  represent 5 percent of Plan assets.
</FN>
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</TABLE>

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