Investor Icahn Lashes Out at Navistar Board

Activist investor Carl Icahn has fired off an open letter to the directors of ailing Navistar international Corp. that harshly criticizes their performance and demands that the company immediately grant four board seats to its largest shareholders.

Icahn, who owns 14.9% of Navistar, blasts the company as a "poster child for abysmal business decisions and poor corporate governance." He complains that the board replaced CEO Dan Ustian in late August, without consulting its largest investors.

Icahn calls the choice of from Textron Inc. CEO Lewis Campbell as chairman and interim CEO "worse than ill-advised," noting that Campbell has "zero experience" in the heavy-truck industry.

Navistar responds that it is disappointed Icahn is pursuing "unproductive tactics of threats, attacks and disruption."

The company's shares have plunged 38% this year amid recalls, warranty expenses, slowing sales of heavy-duty trucks and problems caused by the failure of its heavy-duty diesel engines to meet American emission standards. The U.S. Securities and Exchange Commission is investigating Navistar's financial statements.

Three investors, including Icahn, own nearly half of the company's equity. Hedge fund manager Mark Rachesky owns 14.99% and Franklin Resources Inc. holds an 18.8% stake.

To read Icahn's letter, click HERE.

To read Navistar's response, click HERE.