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Last updated: March 8, 2013 12:41 am
Navistar International, the US truck and engine maker, has appointed a new chief executive as it attempts to bounce back from a bad bet on new diesel engine technology, sending shares up almost 28 per cent to close at $31.89 in New York.
Troy Clarke will take the reins from Lewis Campbell, the interim CEO, on April 15. He had been in charge since the resignation in August of Daniel Ustian, under whose leadership the company had spent $700m on an alternative technology that was not able to meet stricter US emissions standards.
The failure of that project helped drive Navistar’s share of the US heavy trucks market down to 18 per cent in the year ended in October, from 28 per cent during the prior year. The company has now adopted technology used by its competitors, which uses liquid urea to cut nitrogen oxide emissions.
Shares in the company crossed $31 for the first time since May as Navistar reported a $123m, or $1.53 per diluted share, net loss for the quarter ended in January, down 19.6 per cent from a $153m loss during the same period last year.
Mr Clarke, 57, ran the company’s Asia business before becoming president and chief operating officer. He joined Navistar in 2010 after 35 years with General Motors.
The company separated the CEO and chairman roles, naming James Keyes its new non-executive chairman, to “enable [Mr Clarke] to focus exclusively on continuing to successfully execute the company’s turnaround plan”, Mr Keyes said on Thursday.
Mr Campbell said the company’s “return to profitability is clearly in sight” as it launches new engine models in the second half of the year.
Mr Clarke’s experience with the company, Eric Ause, analyst at Fitch Ratings, said, would serve him well.
“Since he’s already been at Navistar for three years, he knows the company well, which is important given the extensive efforts going on right now surrounding the company’s engine strategy and operations,” he said.
Amid declining sales last year, Navistar announced a cost-cutting drive. The company said Thursday it was on track to exceed its goal of reducing structural costs by $175m this year.
In October, Navistar avoided a public battle for shareholder support over the company’s direction by appointing three directors nominated by activist investors Carl Icahn and Mark Rachesky.
Mr Icahn, who then owned nearly 15 per cent of the company, released a statement Thursday praising the appointment.
“The company has a bright future and we are behind Troy 100 per cent in his efforts to build Navistar into a focused, competitive and profitable truck and engine manufacturer,” he said,
Navistar reported sales of $2.64bn, down 12.4 per cent from $3.01bn during the same period last year.
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