Navistar Names Troy Clarke CEO and reports quarterly loss

Navistar has announced the appointment of Troy A. Clarke, 57, as president and chief executive officer, effective April 15, 2013. Clarke, who joined the company in 2010 after a career with General Motors, is currently the company's president and chief operating officer and will also be joining the company’s board.

At the same time, Lewis B. Campbell, who has served as executive chairman and interim CEO since August 2012, will step down from those positions and from the board. James H. Keyes, who has served as a board member since 2002, will become non-executive chairman, also effective April 15.

“Over the past six months, Navistar has made significant progress on many important fronts, including on our three near-term priorities: improving quality, meeting each of our clean engine launch milestones, and delivering on our 2013 operating plan,” Campbell said. “When I assumed the interim CEO role last August, I was prepared to stay as long as necessary to oversee the company through a transition period, and today I am pleased to announce our turnaround is firmly underway and our return to profitability is clearly in sight.”

James Keyes was complimentary about Campbell’s tenure and Clarke’s appointment.
“I want to thank Lewis for his valuable contributions to Navistar. He stepped in during a challenging period of transition for the company, and his leadership was critical in helping align our board and management around a clear path forward,” Keyes said.

“The board is also extremely pleased to name Troy as chief executive officer. He is a proven leader and has been a valuable asset to the executive team since joining the company in early 2010. During his recent tenure as president and chief operating officer, Troy has been instrumental in implementing Navistar's “Drive to Deliver” plan focused on clear accountability and functional excellence; driving the company's transition to its clean engine strategy; and taking aggressive actions to improve Navistar's cost structure.

“We believe that separating the chairman and CEO roles at this time will enable Troy to focus exclusively on continuing to successfully execute the company's turnaround plan and putting the company on a path to profitability entering fiscal year 2014,” Keyes added. “In my new role, I look forward to working with Troy and supporting him and his team in this regard.”

“I am honoured to take on the role of CEO and join the board of Navistar,” Clarke stated. “In six short months, we have made significant progress on our turnaround, and I want to thank Lewis for his guidance and leadership during this period. Working together, we have implemented a number of important actions to set Navistar on the right path, and the company now has a strong platform to build upon going forward.

“Navistar has a great leadership team and a talented group of employees,” Clarke added. “I look forward to continuing to work with them as we take further steps to strengthen our North American core businesses, improve quality and customer satisfaction, drive future profitability, and deliver value to shareholders.”

Navistar also announced a first quarter 2013 net loss of $123 million, compared to a first quarter 2012 net loss of $153 million. Excluding discontinued operations, Navistar recorded a first quarter 2013 loss from continuing operations of $114 million, compared to a first quarter 2012 loss from continuing operations of $144 million.

Manufacturing revenues in the quarter were $2.6 billion, down 12 percent from the first quarter of 2012. The decline was reflective of lower overall industry demand and lower market share resulting from the company's clean engine strategy transition.

“We are beginning to see concrete progress on each of our near-term priorities – improving our quality, launching our new SCR engine programs on schedule and delivering on our 2013 operating plan, which will put us on a path to profitability. Although we reported a first quarter loss, we believe we made solid progress in the first quarter toward these goals,” said Lewis B. Campbell.

“That progress includes submitting our 13-liter SCR engine for certification ahead of schedule, kicking off of pilot production for ProStar+ vehicles with the 13-liter SCR engine, strengthening our quality performance and effectively managing things that we can control. These include aggressively managing inventories and significantly reducing discretionary spending enterprise-wide.”

For the first quarter 2013, the truck segment recorded a loss of $58 million, compared with a year-ago first quarter loss of $27 million. The segment's loss was mainly driven by a decline in traditional truck volumes and $12 million of accelerated depreciation related to the planned closure of the Garland, Texas facility which has been the manufacturing site for the Cat branded trucks sold in Australia. The manufacture of the Cat trucks will be transferred to another Navistar plant.

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