Navistar CEO says company's big divestitures behind it
(Reuters) - Navistar International Corp (NAV.N), the U.S. commercial truck maker that was forced to sell a number of businesses in recent years, has wrapped up the biggest divestitures related to that turnaround, its top executive said on Wednesday.
The company's top priority now, Chief Executive Officer Troy Clarke told Reuters, is regaining market share lost as it struggled to recover from a disastrous bet it made on a costly proprietary smog-reduction system. The emissions-related debacle sent Navistar's warranty expenses skyrocketing even as sales tumbled.
In the interview with Reuters, Clarke confirmed that Navistar has talked in recent months with representatives from Weichai Holdings [SDONGX.UL], one of the world's largest makers of diesel engines and vehicle transmissions.
But he said executives from the two companies had met to "just kind of bat around ideas between us about the kinds of things we could do (together)" and said that Navistar was not in talks to sell any of its business to the Chinese company.
"Any discussions that we’ve had with them most people would consider within the normal course of commercial business between a supplier and a user of technology," Clarke said.
According to regulatory filings, Navistar in recent months has sold off its E-Z Pack unit, which made bodies for garbage truck, as well as its Continental Mixer unit, which made concrete mixers, for prices the company characterized as "not material."
Clarke said those two transactions were "basically a couple million dollar deals" that were in keeping with Navistar's commitment, as it tried to preserve liquidity in the aftermath of the emissions crisis, to "fix, close or sell" any businesses that were consuming cash instead of generating it.
He said that "the big pieces of that (business-shedding effort) have transpired." That cost-saving and cash-generating push has included several plant closures and the sale of the company's Monaco Coach motorhome manufacturing unit.
Navistar remains committed to all its remaining major business units, Clarke said. That includes its engine manufacturing business, which nearly killed the company when it tried - unsuccessfully - to develop an in-house solution to meet tough new U.S. clean-air rules. Navistar will also retain its military vehicle unit, which built nearly 9,000 tactical vehicles for the Pentagon and others during the Iraq and Afghanistan wars but is now largely idle.
"It's not a billion-dollar growth opportunity," Clarke said of the military unit. "But it's not something that’s bleeding off the future fortunes of our company."
The interview came as Navistar reported a smaller-than-expected quarterly net loss and its first pretax quarterly profit from continuing operations since 2011, lifted by growing demand for trucks in North America and falling warranty costs related to its failed emissions-reduction system.
But Navistar's market share continues to fall short of the 21 percent goal management has targeted, an issue Clarke said he was confident the company would correct in the coming quarters.
(Reporting by James B. Kelleher in Chicago; Editing by Lisa Shumaker)