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                                                                   EXHIBIT 10.18



                       NAVISTAR INTERNATIONAL CORPORATION
                             1998 INTERIM STOCK PLAN


                                    SECTION I
                               PURPOSE OF THE PLAN

         The purpose of this  Navistar  International  Corporation  1998 Interim
Stock Plan ("Plan") is to provide an  additional  plan for the issuance of stock
options  and  restricted  stock  for  shares  of the  common  stock of  Navistar
International Corporation to employees of Navistar International Corporation and
its  subsidiaries   ("Corporation")  to  attract  and  retain  highly  qualified
personnel,  to provide key employees who hold positions of major  responsibility
the  opportunity  to earn  incentive  awards  commensurate  with the  quality of
individual performance,  the achievement of performance goals and ultimately the
increase in  shareowner  value.  This 1998 Plan is separate from and intended to
supplement the Navistar 1994 Performance Incentive Plan ("1994 Plan").


                                   SECTION II
                                   DEFINITIONS

         The terms used in this Plan are defined as  specified  in the 1994 Plan
unless the context indicates to the contrary.


                                   SECTION III
                                   ELIGIBILITY

      Management will, from time to time,  select and recommend to the Committee
on Organization of the Board of Directors of Navistar International  Corporation
("Committee")  Employees who are to become Participants in the Plan. However, no
executive officer of the Corporation shall participate in this Plan, except that
options or restricted stock may be issued to a person not previously employed by
the  Corporation  as an inducement  essential to his entering into an employment
contract as an executive officer of the Corporation.  Employees will be selected
from those who, in the opinion of management, have substantial responsibility in
a managerial or professional  capacity.  Employees selected for participation in
the Plan may also be  participants in the 1994 Plan, and  participation  in this
Plan will not be  considered  participation  in a plan that would  affect  their
participation in the 1994 Plan.



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                                   SECTION IV
                                  STOCK OPTIONS

      The Committee may grant  Nonqualified Stock Options to Participants in the
amount and at the time that the Committee  approves.  No Incentive Stock Options
shall be granted.  Options shall be granted under the same terms and  conditions
as options  granted  under the 1994 Plan,  but subject to the  limitation on the
number of shares contained in this Plan.


                                    SECTION V
                                RESTRICTED SHARES

      The Committee may award  restricted  shares for the purposes and under the
same terms and  conditions  as specified in Sections VI and VIII,  and the other
provisions  of the 1994 Plan,  but subject to the  limitations  on the number of
shares contained in this Plan.


                                   SECTION VI
                           ADMINISTRATION OF THE PLAN

      Full power and authority to construe, interpret and administer the Plan is
vested in the Committee.  Decisions of the Committee  will be final,  conclusive
and  binding  upon all  parties,  including  the  Corporation,  shareowners  and
employees.  The  foregoing  will  include,  but  will  not be  limited  to,  all
determinations  by the  Committee  as to  (i)  the  approval  of  Employees  for
participation in the Plan, (ii) the amount of the Awards,  (iii) the performance
levels at which  different  percentages  of the  Awards  would be earned and all
subsequent  adjustments to such levels and (iv) the determination of all Awards.
Any person who accepts any Award hereunder agrees to accept as final, conclusive
and binding all  determinations  of the  Committee.  The Committee will have the
right, in the case of employees not employed in the United States,  to vary from
the provision of the Plan to the extent the Committee deems appropriate in order
to preserve the incentive features of the Plan.


                                   SECTION VII
                     MODIFICATION, AMENDMENT OR TERMINATION

      The Committee may modify  without the consent of the  Participant  (i) the
Plan,  (ii) the terms of any  option  previously  granted  or (iii) the terms of
Restricted  Shares  previously  awarded  at any  time,  provided  that,  no such
modification  will,  without  the  approval  of the  Board of  Directors  of the
Corporation,  increase the number of shares of Common Stock available hereunder.
The Committee may terminate the Plan at any time.



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                                  SECTION VIII
                              RESERVATION OF SHARES

      The total number of shares of stock  reserved and  available  for delivery
pursuant  to  this  Plan  is  500,000   shares  of  common   stock  of  Navistar
International Corporation.


                                   SECTION IX
                                TERM OF THE PLAN

      The  Plan  shall be  effective  on the date of  adoption  by the  Board of
Directors and continue for a term of one year  thereafter.  Provided  that,  the
Committee  shall annually  review the need for the  continuation of the Plan and
may amend or terminate the plan as provided herein.


                                    SECTION X
                                  GOVERNING LAW

      The Plan will be governed by and  interpreted  pursuant to the laws of the
State of Delaware, the place of incorporation of the Corporation.



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