The company named Lewis Campbell, the former chairman, president and CEO of Textron Inc., as executive board chairman and interim CEO. Navistar also promoted Troy Clarke to president and chief operating officer, just three months after being hired away from General Motors.
Campbell, 66, said Navistar will launch a search for a new long-term CEO “at the appropriate time.”
Investors and analysts alike have called for a change in leadership since the company announced two straight quarters of revenue losses. In second quarter 2012 the company reported a loss of $172 million.
Auto industry analyst David Cole said it is common for large companies to change leadership when the company isn’t headed in the right direction.
“The main thing is shareholders are holding the board responsible of for the execution of business in a proper way, and so then the board turns around and looks at the people who are leading the company,” Cole said. “Obviously, the board was not happy.”
Cole said the main issue stemmed from the engine technology the truck manufacturer invested heavily in and developed with aid from the Environmental Protection Agency. The engine never met 2010 carbon emissions standards. Navistar now faces large potential non compliance penalties and had to abandon its own technology to switch to a method that would be compliant.
Besides revenue loss and engines issues, Navistar this year:
* Was taken out of the running for a $14 billion military contract to engineer and develop 55,000 Humvees.
* Announced a Securities and Exchange Commission investigation of Navistar’s finances because of concerns about disclosure and accounting.
* The company’s share price fell more than 50 percent.
* Lost when courts overruled the EPA’s decision to fine Navistar $1,900 per noncompliant engine for being too lenient and for not notifying all other truck manufacturers about the option before they complied with emissions standards. Navistar could now face up to $10,000 for each noncompliant engine.
* Created a “poison pill” measure to prevent shareholders from acquiring more than 15 percent of shares after activist investors began buying large amounts of stock — prompting fear that a forced takeover was in the works.
Navistar stock (NYSE: NAV) closed Monday at $23.32, up 34 cents or 1.4 percent.
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