Navistar International Corp. (NYSE: NAV) Chief Operating Officer Persio Lisboa will be its next CEO and president, the maker of International trucks and IC buses announced Friday.
Lisboa, 54, currently an executive vice president, succeeds Troy Clarke, who will remain at Navistar in the newly created role of Executive Chairman. Both changes are effective July 1.
Navistar had extended Clarke’s term as CEO three times, in part because of an unsolicited takeover offer by TRATON Group, the German truck holding company of Volkswagen AG. TRATON made a $2.9 billion bid on January 30 for all of Navistar’s outstanding shares. The all-cash offer for $35 a share is about $9 above Navistar’s current price.
Clarke, who has been CEO and president since April 2013, will continue to oversee discussions with TRATON in his new role, Navistar said in a press release.
No obvious signs
“I don’t think we can read anything into this relative to the Traton deal unfortunately,” Stephen Volkmann, managing director of equity research at Jefferies & Co. Inc. told Freightwaves.”They have said they will not negotiate in public, so we haven’t had any updates on that.”
Volkmann continued, “It’s an interesting process. On the one hand VW/Traton is managing their own liquidity through the COVID-19 crisis, while on the other hand the longer they wait, the further along Navistar will be in its recovery – which may boost the price at which they are willing to sell,” Volkmann said.
Clarke, 65, was a long-time General Motors Co. (NYSE: GM) executive before coming to Navistar to lead its International Truck and IC Bus brands. While he said he intends to move toward retirement, his latest contract extension included a provision that he would stay on as Navistar board chairman for two years.
Support for Lisboa
“Persio is a strong leader with a proven record of driving results,” Clarke said. “He understands our industry, knows our business segments and will position the company to capitalize on the opportunities ahead.”
Volkmann said Lisboa, who joined Navistar in 1988 and has moved through the company’s ranks, “seems like the natural replacement since he has been COO” since March 2017.
Lisboa oversees the Navistar 4.0 strategy, which includes raising the company’s earnings before interest, taxes, depreciation and amortization (EBITDA) to 12% by 2024, and a goal of 25% combined share by 2025 in its key heavy- and medium-duty and bus markets.
“We have strong momentum with our new product programs, including those under development with TRATON,” Lisboa said in a statement. “The execution of our Lean Manufacturing 4.0 vision is on track, and we’ll continue to introduce new, innovative business solutions to our customers, from connectivity to advanced technologies.
Leading a rescue
Clarke engineered a makeover of Navistar, spearheading the company’s return to profitability. He oversaw the refreshing of its product lines and regaining market share lost in the aftermath of Navistar’s use of exhaust gas recirculation (EGR) technology to treat nitrous oxide emissions from its truck engines early in the previous decade.
EGR technology never gained the U.S. Environmental Protection Agency’s certification for compliance with the agency’s 2010 emissions standards. In 2019 Navistar agreed to pay $159 million to settle a class action and other lawsuits over performance of the MaxxForce engines.
Other engine manufacturers used selective catalytic reduction, or SCR, technology to comply with the EPA’s emissions requirements. Navistar adopted SCR in 2012.