He Be Gone - Almost

Well there you are: The second shoe dropped October 8 as Jim Hebe announced his retirement as Navistar senior vice president for North American sales operations. His career path had been a matter for speculation after the departures of Dan Ustian, chairman and CEO, Dee Kapur, vice chairman and chief product officer in the management meltdown at the company.

Arguments for and against Hebe's continued employment hinged on whether he might run the company, as he had done so successfully at Freightliner or whether he would get the heave-ho when all the warranty, guaranteed residuals and potential litigation chickens came home to roost. In the end, it looks like Hebe shot himself with the new managers Lewis Campbell and Toby Clarke. Or maybe the Navistar Board.

Who Gives A ... ?
In what has become known as the "clarity and transparency" press conference, held last month at a "boot camp" in Tooele, Utah, Hebe’s presentation was peppered with expletives. Some furious scurrying around by PR folks to discover recordings of what exactly was said was quickly followed by Hebe deciding to "retire". Speaking of the troubles at the top of Navistar, Hebe is quoted verbatim in Landline Magazine. “We’re still going to go through the next few months of Rachesky and Icahn trying to decide who is going to be the dominant force on our board,” Hebe said.


“Who gives a shit,” he told the audience of International dealers and trucking editors (not me, incidentally. I wasn’t invited!) on Sept. 26. “At the end of the day, who cares who sits on our board of directors? It sure as shit didn’t make any difference for the last three years. Why would it make any difference going forward?”

Essentially, though, his presentation was about a brave new world at Navistar where company managers and spokepeople would no longer be badmouthing the competition. Implicit was that the company would no longer make unsupportable claims about its products.

“We’re through with the B.S.,” Hebe is quoted in Landline saying. “We’ve had enough of it the past three years.” Personally, I don't doubt there are many competitors who feel the same way.

Hebe also confirmed that the 15-liter based on Caterpillar iron is a dead duck.

But Hebe, 63, is not altogether gone at Navistar. The word is he will continue with a much reduced role as a consultant because of his customer contacts. That could mean that only Hebe knows the details about some of the deals that have been cut.

Board Shakeup
Meanwhile, back at the store, the Navistar Board, dodging a proxy fight or litigation, lopped off three members that include Eugenio Clariond and Steve Klinger to accommodate Carl Icahn and Mark Rachesky. Icahn and Rachesky, who previously worked as Icahn’s managing director, each own just shy of 15% of Navistar and demanded representation on the board. Icahn has nominated Vincent Intrieri to sit along with Rachesky and a third yet to be announced, who must be agreeable to the two shareholders.

Intrieri has worked for entities related to Icahn since October 1998, Rachesky is Co-Founder, President, and Investment Chief at MHR Fund Management. When announced on October 8, the settlement with Icahn sent shares up more than 7 percent in morning trading to $22.70.

Steve Gilligan (left) details changes to ProStar Plus side skirts. At right is a proud Ed Pence, Cummins Vice President and General Manager – Heavy-Duty Engine Business admiring the big red thing under the ProStar’s hood. Note the blue filler cap for the 23-gallon DEF tank!

New Engines, New Products
The day before, and signaling a sea change, I was welcomed by a gracious Steve Gilligan, vice president, product and vocational marketing to a Navistar press walk-through of a ProStar Plus with a Cummins ISX 15 and a LoneStar with the 13-liter MaxxForce engine. The event was held at the Navistar booth at the ATA Management Conference and Exposition in Las Vegas.

Both trucks featured the Cummins-derived aftertreatment for selective catalytic reduction. The ProStar also featured newly designed roof and side skirts, re-engineered to save weight. And while the skirts were hand-laid-up prototype panels accommodating SCR tank and devices, they look like the production panels on the Cummins powered trucks going into production at the start of 2013, according to Gilligan. MaxxForce SCR engines will take longer to get ready, appearing some four months later.

Gilligan said the work done so far is on ProSar Plus and LoneStar since these trucks are most popular in over-the-road applications and so cover a major part of Navistar’s International production.