Navistar’s Newest Executive ‘Bullish’ About Truck Maker’s Turnaround

This story appears in the Aug. 12 print edition of Transport Topics.

Bill Kozek, the new president of the North American truck and parts business for Navistar International Corp., said he now has what he wants: the challenge of turning around a major truck manufacturer.

After 26 years with Paccar Inc., including stints as general manager of Peterbilt Motors and Kenworth Trucks, Kozek, 51, is now 1½ months into the battle of helping return the maker of International trucks and MaxxForce engines to profitability.

“It’s exciting, but a lot of hard work. If we do this, it will take a lot of good things from our employees, dealers and supply base; but I think there will be a lot of satisfaction” if the task is completed, Kozek said during an Aug. 6 phone interview with Transport Topics.

“I believe in [Navistar CEO] Troy Clarke’s vision . . . I’m bullish about our future,” said Kozek, who departed as Peterbilt’s general manager in May. Kozek succeeded Jack Allen as Navistar president in June after Allen was elevated to chief operating officer.

Kozek said he has been working on the company’s manufacturing processes and calling on customers. While he has not yet seen the company’s plant in Escobedo, Mexico, Kozek said he has been to the Springfield, Ohio, and Melrose Park, Ill., facilities. The company’s headquarters is in Lisle, Ill., outside of Chicago.

“We’re working on lean production systems and taking the waste out. We’ve introduced a lot of products and taxed [the plants] a lot, but so far we’re pretty happy with how manufacturing has been running with this,” he said.

Through the first half of 2013, Navistar has sold 12,236 of its heavy-duty International trucks in the United States. That was a 35.1% reduction from 2012’s first half and the greatest market deterioration of any Class 8 truck maker. Navistar’s six-month market share dropped to 14.3%, or 4.7 percentage points less than last year.

As a result, Navistar lost $497 million, or $6.19 a share, for its fiscal six months ended April 30. The company is scheduled to report earnings for the July 31 quarter in early September.

During that six-month period, Kozek’s truck division had an operating loss of $167 million, while the parts division earned $177 million.

In contrast, Kozek’s former employer, Paccar, earned $527.7 million, or $1.49, a share, during the first half of this year ended June 30. The company has posted a net profit every year since 1939.

Clarke, Navistar’s CEO, has spent much of the past 12 months telling customers and investors that Navistar will launch its revamped truck and engine models promptly.

“Our first responsibility is the reputation and confidence in International products for our customers,” Kozek said. “We had an engine strategy that didn’t work, but now we need to get our new trucks into people’s hands.”

Beyond Navistar’s personnel, whose jobs depend upon the company’s turnaround, Kozek said the customers he has met with want the OEM to succeed.

“They understand what happened to us, but they’re glad it’s in the rearview mirror for us now,” he said.

Kozek said the Navistar job has placed him into two new markets, medium-duty trucks and school buses. Both Paccar companies sell medium-duty trucks in North America, but not as many as Navistar, which is more likely to sell to large leasing companies such as Penske Truck Leasing and Ryder System, Kozek said.

His Paccar experience did prepare him for two important matters at Navistar, he said. Like Paccar, Navistar is a big purchaser of Cummins Inc. engines. And at Peterbilt, he worked with dealership chain Rush Enterprises, the nation’s largest retailer of Peterbilts, which also sells Internationals.

“It’s a lot easier here knowing those guys,” he said. “It allows for the open conversation and debate we need to do business.”

As to how the switch occurred, Kozek said he has known Allen for years, and the two men talked at industry events. Eventually, Allen arranged for a lunch with Clarke and Kozek, who lived in the Midwest for many years.

“I wanted to be part of a turnaround, and if I didn’t do it now, I didn’t know when I’d have the chance,” Kozek said.