Navistar International Corp. unveiled its International TerraStar 4×4 commercial truck — one of the company’s newest additions to its comprehensive Class 5-8 product portfolio — at the National Truck Equipment Association (NTEA) Work Truck Show at the Indiana Convention Center in Indianapolis.
Launched in 2010 in a 4×2 configuration, the International TerraStar offers truck buyers a wide range of commercial duty features not offered in other trucks, according to a press release.
“The TerraStar is the smaller sibling to the DuraStar, the best selling medium-duty model throughout the past two decades, leveraging the same platform and commercial grade components,” said Jack Allen, Navistar’s president, North American Truck and Parts. “The TerraStar shares the same rugged, durable and hardworking DNA, making it in a class unto itself. The TerraStar 4×4 will deliver additional commercial duty capability for a wide range of customer needs, including construction, utility, landscape, and other off-highway applications.”
At the heart of the TerraStar 4×4 is its 300 horsepower, 6.8-liter V-8 engine, delivering 660 lb.-ft. torque. This engine features a compacted graphite iron (CGI) block which offers high strength without added weight.
With 38% more visibility and 30% more cab interior space than the competition, the TerraStar also offers outstanding maneuverability in even the tightest work environments. In addition, the commercial grade TerraStar cab, available in extended cab or crew cab configurations, is designed to be more durable than the competition and is constructed with double-sided, galvanized high-strength steel protected by a five-step professional grade coating process to resist corrosion.
Navistar International Corp. Chairman and CEO Lewis Campbell predicted the damage to the commercial truck marker’s share of the North American market will be short-lived, as Navistar moves away from a failed strategy for treating engine exhaust.
MarketWatch reported that Navistar’s average share of the heavy-duty truck market in the 12 months to the end of January was about 16.5%, down from about 21% in 2011, according to industry estimates. Campbell expects Navistar to regain the lost ground during 2014 with a revamped line of engines. Navistar, which builds recreational vehicles through its Navistar RV division, is the third-largest seller of heavy-duty trucks in North America behind Daimler AG’s Freightliner brand and Paccar Inc., maker of Peterbilt and Kenworth trucks.
Campbell anticipates the company’s 13-liter engines featuring an exhaust-treatment system built by Cummins Inc. will be a hit with buyers once the truck operators become familiar with the engines. The 13-liter engine is the centerpiece of the company’s large diesel engine lineup. Moreover, he said demand for Navistar’s International brand trucks should receive a boost from the completion of warranty-related engine repairs that have dogged heavy-duty trucks sold since 2010. Campbell said warranty claims this year will be significantly less than in 2012, adding that no new problems have been discovered.
“Once we get all those trucks converted, I think you’ll be surprised at how quickly we regain share,” Campbell said during an interview Tuesday (Feb. 19) with Dow Jones Newswires following the company’s annual shareholders’ meeting near Chicago.
Navistar is waiting for the U.S. Environmental Protection Agency to certify that the company’s 13-liter engines meet the agency’s latest standard for reducing smog-causing nitrogen oxide in diesel-engine exhaust. Navistar submitted its 13-liter engine for certification in early January. Campbell said the evaluation remains under way and reiterated his earlier forecasts that the certified engine could reach the market slightly ahead of schedule in late March.
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Troy Clarke, president and COO of Navistar International Corp., will be the keynote speaker at the 23rd annual Heavy Duty Manufacturers Association breakfast and briefing during the Mid-America Trucking Show in Louisville, Ky.
The event will be held March 22, immediately before the opening of the day’s show at the Kentucky Expo Center.
Clarke was named president and COO of Navistar last August, not long after being named president, Truck & Engine in July. Before that, he was president of Navistar Asia Pacific, where he was responsible for leading the company’s global growth initiatives.
Clarke joined Navistar in December 2010 after 35 years at General Motors, where he most recently was president of GM North America and GM group vice president.
Navistar International Corp. today (Dec. 19) announced a fourth-quarter 2012 net loss of $2.8 billion, or $40.13 per diluted share, compared to fourth quarter 2011 net income of $255 million, or $3.48 per diluted share. Current quarter results included increased non-cash tax expense of $2 billion, or $28.59 per share, for the increase in deferred tax valuation allowance on U.S. deferred tax assets.
Fourth-quarter results also included pre-tax charges of $149 million in additional pre-existing warranty expenses primarily related to EPA 2010 big bore engines, $73 million for cost reduction actions, $16 million in charges for the restructuring of North American manufacturing operations and engineering integration and $14 million in non-conformance penalties (NCPs).
The company, which produces recreational vehicles through its Navistar RV division, reported a pre-tax loss of $566 million in the fourth quarter 2012 versus a $275 million pre-tax profit in the fourth quarter 2011. Revenues in the quarter were $3.3 billion, down 24 percent from the fourth quarter of 2011. The loss was reflective of lower sales, as well as the adjustments to pre-existing warranties and the charges related to the cost-reduction actions.
The company exceeded its fiscal year 2012 guidance with $1.5 billion in manufacturing cash and marketable securities. Contributing factors in the fourth quarter included $363 million improvement in working capital and net proceeds of $192 million from an equity offering.
“We continue to make significant progress on our turnaround and the complexity of this quarter’s results is reflective of the actions necessary during this time of transition,” said Lewis B. Campbell, Navistar chairman and CEO. “The team has delivered numerous successes, including exceeding our cash guidance, launching the ProStar with the ISX 15-liter ahead of schedule and moving forward with several opportunities identified during our ROIC-focused business reviews. Additionally, with the improvement to our manufacturing footprint by closing our Garland, Texas, manufacturing plant and the completion of work force reductions in North America and South America, we are positioned to exceed our goal of reducing structural costs by $175 million.
“Unfortunately, we saw a spike in warranty spend in late October and early November for the few remaining engine issues and the cost to take the proactive actions to support our customers and fix those items is higher than we anticipated,” Campbell continued. “However, the fact is that customer feedback and positive three- and nine-months-in-service data show today we are delivering the highest quality trucks since the 2010 launch, and quality will continue to be our top priority.”
The net loss for fiscal year 2012 was $3.0 billion, or $43.56 per diluted share, versus net income for fiscal 2011 of $1.7 billion, or $22.64 per diluted share.
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Navistar International Corp. announced that the first heavy-duty highway rig equipped with a less-polluting Cummins Inc. engine came off the production line this week at Navistar’s plant in Mexico.
Chicago Crains Business reported that this is a milestone for Lisle-based Navistar, which was unable to produce a diesel engine that meets tighter emissions standards.
In a statement, the company said the teams at Navistar and Cummins have been “laser-focused” on a seamless implementation of the launch plan.
“This is a great accomplishment for Navistar and an important milestone as we bring our first SCR-based Class 8 trucks to the marketplace,” Navistar President and COO Troy Clarke said in a statement. “The entire launch team and hundreds of others working behind the scenes are committed to a high-quality launch, and this achievement is another proof point in our progress.”
In August, after a three-year struggle, Navistar abandoned its technology and said it would purchase engines from Columbus, Ind.-based Cummins. The failure led to the ousting of CEO Dan Ustian, who had led the failed engine development.
Navistar is recovering, said interim CEO and Executive Chairman Lewis Campbell. “We have the right plan and strategy in place to turn this company around in the next 12 to 18 months,” Campbell said recently during a session at the Baird Industrial Conference in Chicago.
The company said a smaller Navistar engine will enter initial pilot production in March with regular production beginning in April.
Navistar International Corp.’s interim chief executive said Tuesday (Nov. 6) the company will get smaller before it gets bigger but underlined that he will not have a fire sale on any business unit.
“We have the right plan and strategy in place to turn this company around in the next 12 to 18 months,” Lewis B. Campbell said during a session at the Baird Industrial Conference held in Chicago.
The Chicago Tribune reported that Campbell announced in September a number of cost-cutting initiatives, including selling or closing business units and laying off about 700 salary workers. The company’s overall goal then was to cut costs by $150 million to $175 million per year.
Campbell said Tuesday the layoffs were completed at the end of October and that the company expects to exceed its cost cutting goals. The company’s Navistar RV unit builds Monaco, Holiday Rambler and R-Vision recreational vehicles.
Last month, Navistar said it will close a truck assembly plant in Garland, Texas, in the first half of 2013 and move production to the company’s plants in Escobedo, Mexico, and Springfield, Ohio, to cut costs.
The plant closure is expected to reduce Navistar’s operating costs by $25 million to $35 million annually. Costs from the Garland plant closure, including buyout packages, are not expected to exceed $10 million before taxes in the fourth quarter. Next year, Navistar expects pre-tax charges ranging from $30 million to $50 million.
The Lisle, Ill.-based truck-and-engine maker employs about 900 salaried, hourly and third-party temporary workers at the Garland facility.
Campbell said he will be at the manufacturing facility in Mexico next week, when the plant will be building the first truck with an engine from competitor Cummins Inc. He added that Navistar has sold 300 trucks that will be made during the rest of the year.
Navistar spent more than $700 million developing an engine that does not meet 2010 federal emission standards. The truckmaker changed its course after reporting a second-quarter loss of $172 million.
Last month, it completed a deal to sell diesel engines from Cummins in its heavy-duty trucks. It will also use Cummins’ technology to make engines that meet federal requirements.
Campbell said Navistar ended the year with more than $1.4 billion in cash. He expects to start paying off debt by the end of fiscal 2013. To raise cash, Navistar sold about 11.4 million shares at $18.75 per share. The sale increased to 80 million the company’s common shares outstanding.
“I see a company that has a sense of urgency, that is being unleashed as we get problems behind us and address the next problem that we see we need to focus on,” Campbell said.
Navistar International Corp. said Monday (Nov. 5) it sold 763,534 shares to underwriters of a previous stock offering, raising more than $14 million for Navistar’s general fund.
The Chicago Tribune reported that the sale, at $18.75 per share, increases to 80 million its common shares outstanding.
Last month, the Lisle, Ill.-based truck-maker sold 10.7 million common shares at $18.75 per share, raising $192 million after discounts and expenses.
Analysts have raised concern’s about the company’s cash for months. Navistar spent more than $700 million developing an engine that does not meet 2010 federal emission standards.
Navistar changed course after reporting a second-quarter loss of $172 million. Last month, it completed a deal to sell diesel engines from competitor Cummins Inc. in its heavy duty trucks. It will also use Cummins’ technology to make engines that meet federal requirements.
To address a number of topics prior to the Recreation Vehicle Industry Association’s (RVIA) 50th Annual National RV Trade Show, Nov. 27-29 in Louisville, Ky., Navistar International Corp. President & COO Troy Clarke agreed this week to field an array of questions on behalf of the Lisle, Ill.-based company, a global truck builder and parent company of Navistar RV. Clarke, a former GM executive like Navistar’s new chairman Lewis Campbell, joined Navistar in 2010 and assumed the reins of the company’s top day-to-day job in late August during rather turbulent times for the legendary Chicago-based firm. Here’s the highlights of that RVBUSINESS.com conversation:
RVBUSINESS.com: There have been quite a few changes for Navistar over the past several months and plenty of news reports in recent weeks about the company. What, in your view, is going on at Navistar these days?
Clarke: Yes, you’re right, we’ve had a good amount of change these past several months. One of the major announcements was the change in our engine strategy. For our commercial trucks and engines, we’ll begin to use the same emissions technology, a system called Selective Catalytic Reduction, or SCR, the same one used by our competitors. With this change in strategy, we’ve made several other important changes and announcements, including bringing on our new CEO, my boss, Lewis Campbell.
Together, Lewis and I have been working with the Navistar leadership team on a plan we call “Drive to Deliver,” which provides a renewed emphasis on our company’s North American truck and engine business and doing the things that need to be done to quickly turn the company’s performance around and drive shareholder value.
RVB: So, what are some of these things you’re doing to improve the performance of the overall company?
Clarke: Well, as we move to our new emissions technology, we’ve really tried to take some noise out of the system, address some of the criticism head-on and make some decisions that will help make this a smooth, swift and high-quality transition. We’re bringing back the Cummins ISX15 in our trucks and will use the Cummins SCR aftertreatment system for our heavy-duty engines.
We believe we have sufficient liquidity to make this transition, and we expect to end our 2012 fiscal year at the high end of our guidance of $875 million to $1.25 billion in operating cash. And, just last week we announced a public offering of stock that generated upwards of an additional $200 million to enhance our balance sheet. We did this to put to rest yet another uncertainty — the question of whether Navistar will have enough available liquidity to manage through the current industry downturn and bridge us through our new product launches throughout the year.
RVB: And how about your Navistar RV business? How will it be impacted by these developments?
Clarke: We are currently evaluating all parts of our non-core business, which we define as businesses outside our core North American truck, engine and parts businesses. We are making an assessment as to both their strategic fit and their current and anticipated return on invested capital – ROIC — using a disciplined process. We are moving quickly, and we will communicate those decisions when appropriate.
RVB: So, for the benefit of all those who regularly visit RVBUSINESS.com and generally follow the industry, the question looms: Do you consider Monaco, Holiday Rambler and R-Vision brands part of Navistar’s “core business?”
Clarke: Our focus is on restoring our North American truck, engine and parts businesses to their market leading positions. While we view our RV business as an important part of our what we do, we do not consider Navistar RV and our Monaco, Holiday Rambler and R-Vision brands to be a part of our “core” North American commercial truck, engine and parts business. So, RV is under review.
RVB: Then, if Navistar RV is under review, what does that mean for the Navistar RV business moving forward?
Clarke: It’s important to note that Navistar RV is not being singled out; all aspects of our business are on the table for review. As you know, there’s been some steady growth over the past few years in the RV industry, and we’re committed to the long-term viability of the RV business.
Navistar RV President Bill Osborne and the entire Navistar RV team are excited about the great new products we’re introducing at next month’s Louisville RVIA show and we are well positioned to take advantage of the growing RV industry.
RVB: What, specifically, are some of the things the company is looking to improve on the RV side of the business?
Clarke: When Navistar acquired Monaco out of bankruptcy a little more than three years ago, we implemented many changes to enhance the business. We recently completed a number of actions to improve our quality, increase efficiencies, reduce costs and better leverage the significant RV supplier base in northwest Indiana. So, many improvements have already been made.
RVB: And you closed down your Coburg, Ore., operations.
Clarke: Yes, in August of 2011, we announced the consolidation of our manufacturing operations from Coburg, Ore., to Wakarusa, Ind. and those actions are complete. Since January of this year, we have added more than 500 manufacturing employees to ramp up production in our Elkhart and Wakarusa facilities. In fact, our 2014 model year lineup and the RVs we’ll be showing next month at the Louisville Show represent the first RVs produced through our streamlined manufacturing processes. As a result, we’ll be able to provide our customers with the best combination of quality, comfort and affordability in the industry.
We’ve done some other things as well to improve the business. We’ve leveraged the sourcing and engineering strengths of Navistar to achieve improved scale, higher quality standards and improved costs. And, we also closed our Union City, Ind., RV chassis operations and have idled production of our Workhorse RV and step van chassis operations.
RVB: So, realizing that your evaluation is currently underway and looking in your crystal ball, what, realistically, does the future hold for Navistar RV? Is there a chance Navistar could sell or close its RV business?
Clarke: We are committed to the long-term viability of our RV business. With that said, there are really three potential outcomes for our RV business — close the business, sell the business or continue to invest in and grow the business.
Well, I can tell you, we have no plans to close the business and have not studied a closure scenario. It is not our plan to do so. In the last three years, we’ve made significant investments and have taken actions that have delivered improvements in the performance of the business. Right now, we are simply evaluating all of our businesses to ensure they are delivering the appropriate “Return on Invested Capital” and have the right strategic fits.
Selling the business is a realistic potential outcome and would support our efforts to maintain the future viability of the business. If a sale were to occur, Navistar would be looking to sell to a buyer who can create more value in the RV business than we can.
If someone else can maximize its value, that is ultimately best for all stakeholders. That’s another option and one that we are closely evaluating. Now, this would not be a distressed sale. We don’t have that need. As I said, we have the cash necessary to manage our emission transition plan. And, we have already made investments in the business and have taken actions that are driving improvements in the business.
RVB: Any other closing comments, Troy, or anything else you’d like our readers to know?
Clarke: Let me end with where I began. When evaluating our businesses, and in this case, Navistar RV, we are using a disciplined process to assess both return-on-invested capital and strategic fit and the close/sell/grow options. We want to make these decisions in a timely manner to address the uncertainties for our employees, customers and dealers, but we won’t sacrifice performing the due diligence that’s required. My commitment is that when we have made a decision and are ready to announce that decision, these key stakeholders will hear about it first from us.
Navistar International Corp. said it intends to close a truck assembly plant in Garland, Texas, by the first half of 2013 as part of its efforts to cut costs, according to a report in the Chicago Tribune.
“Closing a facility is always difficult because of its impact on the many great people who’ve been part of our company,” Troy Clarke, Navistar president and chief operating officer, said in a statement. “But the fact is that Navistar has too much manufacturing capacity in North America, and we must take quick action to improve our business and position the company for long-term success.”
Navistar employs about 900 salaried, hourly and third-party temporary workers at the Garland facility. Production will be moved beginning in January 2013 to the company’s plants in Escobedo, Mexico, and Springfield, Ohio.
The plant closure is expected to reduce Navistar’s operating costs by $25 million to $35 million annually. The company’s overall goal is to cut costs by $150 million to $175 million per year.
The truckmaker, parent to Navistar RV, has already laid off about 800 salaried workers. Navistar expects those job cuts to save the company $70 million to $80 million annually.
Truck and engine maker Navistar International Corp. is willing to look at the possible sale of any part of its business as it tries to return to profitability but it is not willing to consider fire sale prices for its assets, interim Chief Executive Lewis Campbell said on Monday (Oct. 29).
Reuters reported that Campbell, who replaced CEO Dan Ustian in August, said he came out of retirement because he was excited about the prospect of turning around an iconic American business. The company is about halfway through an analysis of every business it operates, he said.
“Every business we have, like it or not, is going to go through the eye of the ROIC needle,” Campbell told an auto industry conference in Las Vegas that was monitored via the Internet. ROIC refers to returns on invested capital. Any business that does not improve within a reasonable time, “we might try to monetize it,” Campbell said.
The company is cutting costs and is weighing asset sales, targeting savings of up to $175 million next year. It has also sold 10 million common shares to raise funds for capital spending and other initiatives, creating a cushion in case of a severe slump in demand.
Navistar had struggled to win U.S. regulatory approval for a new diesel engine technology that it dropped in August, saying it would buy engines from Cummins Inc (CMI.N). The Navistar engine design could not be saved, Campbell concluded early in the review of the business, he said.
Earlier this month, it agreed to appoint three new members to its board, avoiding a proxy fight with activist investors Carl Icahn and Mark Rachesky, who have demanded changes. Icahn had criticized the company’s product strategy, called its appointment of the new CEO “ill-advised,” and had demanded representation on the board.
Navistar has laid off or bought out some white-collar workers, is reducing engineering spending, and will review whether it needs all 19 of its North American factories at a time when a shaky U.S. economy is hitting demand for trucks.
The Lisle, Illinois-based company, which also makes Monaco recreational vehicles, school buses and military vehicles, may take further steps beyond those already outlined if the U.S. economy turns out to be “abnormally lousy” next year, the interim CEO said.
“We have plenty of cash so we’re not fire-saling” assets, Campbell said, adding Navistar would likely end its quarter with about $1.25 billion in cash, the top of its forecasted range or somewhat above it.