Navistar's Clarke takes wheel after 9 months riding shotgun
BOSTON (Reuters) - Nine months ago, Troy Clarke was introduced to Wall Street as Navistar International Corp's (NAV.N) CEO-in-waiting. On Thursday, Clarke finally snagged that promotion, after the U.S. truck maker took a couple of unexpected detours.
First, Navistar's then-CEO, Daniel Ustian, was ousted last August. He was replaced by former Textron Inc (TXT.N) Chief Executive Lewis Campbell.
"Lewis came in, was introduced to me as the interim (CEO) and so, great, I looked it up in the dictionary and said, 'I may still have a shot,'" said Clarke, who will succeed Campbell as CEO on April 15. "It didn't take long for us to forge an effective partnership to make things happen."
Clarke, 57, joined Navistar in 2010 and was named chief operating officer last year. Before joining the truck and engine maker he was at General Motors Co.
Investors welcomed Clarke's appointment on Thursday, the same day Navistar reported a narrower-than-expected first-quarter loss. Its shares closed 27.8 percent higher at $31.89. Earlier, the stock touched $32.37 - the highest level since last May.
When Campbell showed up at Navistar's headquarters in Lisle, Illinois, in August, he found that Clarke and his team had already developed a plan aimed at stemming the losses that resulted from the company's ill-fated attempt to develop a new generation of heavy truck engine, which failed to win U.S. regulatory approval.
The plan involved cutting costs by reorganizing the company so that its various product lines did not operate as independent fiefdoms.
"He became accountable for a plan that he didn't write. He gave us confidence that it was the right thing to work on," said Clarke, referring to Campbell.
Campbell moved aggressively to right the company, which was facing mounting losses and a falling share price - on his watch, Navistar raised almost $200 million in cash in a share offer, closed a factory in Texas and smoothed relations with No. 3 shareholder Carl Icahn.
Icahn had blasted Campbell's August appointment, complaining that he had not been consulted, but on Thursday he issued a statement saying he was "100 percent" behind Clarke.
Clarke admitted he has a ways to go in repairing investor confidence. The same day Ustian named him chief operating officer, Navistar's shares plunged 28 percent after the company stunned Wall Street with a hefty net loss.
Even with Thursday's stock rise, the shares remain well below their most recent 52-week high of $43.06, reached on March 19, 2012.
Wall Street expects the company to return to profitability next year, and Clarke said he believes the key to improving the stock price will be for Navistar to hit its targets.
"We need to lay out ... what we intend to accomplish, quarter by quarter, and then hopefully be standing there at the end of every quarter and hopefully be able to say that we accomplished what we set out to do.
"Eight quarters of us doing what we say we would do could only be good for our credibility and for how people look at us."
(Editing by Matthew Lewis)