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October 8, 2012 11:30 AM, EDT
Navistar Announces Hebe’s Retirement, Production Plans
Agrees to Add Three Board Members

By Neil Abt, Managing Editor, with reporting by Rip Watson, Senior Reporter

Navistar International Corp. this week announced the retirement of well-known executive Jim Hebe, the appointment of new board members and outlined a plan for full production of trucks with Cummins ISX engines at the start of next year.

The retirement of Hebe, 63, senior vice president of North America sales operations, was announced on Oct. 8. On the same date, the company announced that three board members would be added to satisfy two major investors.

The day before, Steve Gilligan, vice president of product and vocational marketing made the announcement about the Cummins engine that will be used in the ProStar.

In addition, Navistar’s own MaxxForce 13-liter engines with Cummins’ selective catalytic reduction systems will be ready in April, said Gilligan, who spoke at American Trucking Associations’ Management Conference & Exhibition in Las Vegas.

Gilligan spoke to journalists in the exhibit hall as Navistar displayed test models of its ProStar with a Cummins ISX engine – which will be offered first – as well as a LoneStar with the MaxxForce 13-liter, 500-horsepower engine.Both trucks are compliant with Environmental Protection Agency emissions regulations, Navistar said.

The latest equipment entries come as the company is seeking to rebuild sales momentum and offer new engine choices to customers.

On the personnel front, Hebe is leaving after leading Navistar’s sales and market efforts for the past four years, a role that was the latest accomplishment in a four-decade career.

Navistar announced that Vincent Intrieri, as a representative of major investor Carl Icahn, and Dr. Mark Rachesky, another large investor, are being added to its Board of Directors.

A third member agreeable to Icahn and Rachesky will be added as part of an agreement that the investors made not to pursue a proxy fight or litigation.

Icahn and Rachesky together own nearly 30% of Navistar’s shares. The three new persons will be replacements on the 10-member board, since an equal number of current members will give up their seats.

Speaking in Las Vegas, Gilligan said test builds with the ISX engine will begin next month, with a ramping up of testing in December, before full production begins at the start of 2013.

The ProStar model in the exhibit hall included a lighter roof, a new navigation system, trailer skirts and other features.

Gilligan said dealers are already taking orders, and that the ProStar with ISX will boost prices by an estimated $3,900 over a comparably equipped ProStar with the MaxxForce 13.

The departing directors are Eugenio Clariond and Steven Klinger as well as a third person to be named later.