Navistar Replaces CEO with Ex-Textron Executive

Dan Ustian resigned as president, CEO and chairman of Navistar International Corp., which has struggled since his diesel emissions strategy resulted in an engine that failed to meet U.S. regulatory standards.

The Lisle, Ill.-based company has recruited Lewis Campbell, retired chairman and CEO of Textron Inc., as chairman and interim CEO. Campbell spent 24 years at General Motors Co. before joining Textron in 1998.

Troy Clarke, who took the newly created job of president of Navistar's truck and engine operations on July 1, has been promoted to president and chief operating offer. Clarke, a former president of GM's North American unit, joined the truckmaker in 2010.

The company said earlier this month the U.S. Securities and Exchange Commission is requesting information about unidentified accounting and disclosure issues dating back to late 2010. Analysts speculate the SEC is probing whether Navistar properly disclosed the severity of its difficulties in developing a Class 8 diesel engine to meet U.S. Environmental Protection Agency emission standards for 2010.

Analysts say Ustian's downfall was championing exhaust-gas recirculation technology (EGR) as the way to comply with the EPA rules. Other makers of trucks and engines met the regulations by using a different technology: selective catalytic reduction.

Last month the company abandoned the EGR strategy and agreed to buy engines and components from rival Cummins Inc.