NEW YORK: Navistar International Corporation named a new chief executive with the backing of activist investor Carl Icahn, sending the truck maker’s stock up as much as 28 per cent as investors bet on a recovery from a disastrous engine redesign.
Chief Operating Officer Troy Clarke will take over as CEO from turnaround specialist Lewis Campbell, a former Textron chief, who took on the task of fixing the faltering manufacturer after the failure of its new generation diesel engines.
Revenue is still falling, the company’s latest quarterly result showed, although it forecast market share gains later this financial year.
Icahn, Navistar’s third-largest shareholder who agitated for change in the company during its troubled times, said Clarke’s work to improve manufacturing operations showed he was “the right man” to be CEO.
“We believe that Troy will be able to focus the company on its core business, execute on aggressive cost and market share targets and ultimately succeed in leading Navistar to the dominant position in North America heavy truck market,” Icahn said in a statement.
Under Campbell, Navistar cut jobs, sold interests in non-core joint ventures, raised money by selling shares and avoided a proxy fight with Icahn by agreeing to appoint new board members.
“Our turnaround is well underway and is gaining momentum, which is why we are now ready to put a longer-term CEO in place,” Campbell said on a conference call with analysts. “We can see the end of the runway and it looks very good.”
Campbell took over as interim CEO in August after Navistar fired former CEO Daniel Ustian over problems with the engine, which was designed to meet new emission control standards but failed to get regulatory approval.
Clarke joined Navistar from General Motors in 2010. He was named COO last year and will take on the top job next month.
Navistar ran up quarterly losses after the US Environmental Protection Agency denied approval for its new diesel engine. Unlike rivals Paccar Inc and Volvo AB, the company was attempting to limit emissions of the greenhouse gas nitrogen oxide without using additive urea.