Navistar CEO says focus will be on truck reliability

Workers will vote on new UAW contract Sunday.

Navistar’s CEO said this week the company will focus on improving truck reliability and slashing maintenance time as a way to attract new customers and regain a bigger share of the truck market.

The company has struggled in recent years after turmoil and changes in its top management. It also closed some facilities and fought to overcome a failed engine technology for heavy-duty trucks that failed to meet standards set by the Environmental Protection Agency.

But the company has made progress resolving those problems and expects to regain customer confidence over the next few years, said Troy Clarke, Navistar’s president and CEO.

Navistar is a major employer in Springfield, where its facility employs about 1,100 workers. The company recently reached a tentative four-year agreement with its United Auto Workers employees, which was seen as critical to the local facility’s future. UAW members are expected to vote on whether to ratify both a local and national contract with the company at Springfield High School Sunday.

UAW officials could not be reached for comment Thursday.

The company plans to manufacture more reliable trucks and keep them on the road longer, referred to as “uptime,” as a way to distinguish Navistar from its competition, Clarke said. “Uptime” means a longer period between when the company’s trucks need maintenance and how quickly repairs are made, he said.

“We believe we can gain a competitive advantage by being the uptime leader in our industry,” Clarke said.

The company’s OnCommand Connection technology is a key to Navistar’s future, Clarke said. The system is installed on the company’s trucks and can remotely diagnose problems so they can be repaired more quickly and efficiently, he said. Navistar already collects data from about 80,000 vehicles a day, he said.

“We want the truck to arrive at the dealer with a fault code diagnosed and a repair plan ready,” Clarke said.

Clarke also discussed other problems that led to Navistar’s recent losses in the truck market. Navistar had tried to develop its own proprietary engine technology, called Exhaust Gas Recirculation, to meet EPA standards for heavy trucks.

“A cornerstone of the product strategy was the advanced EGR emissions technology,” Clarke said. “The EGR emissions technology just did not come to pass, so in 2012 we entered into a period of dramatic change.”

As Navistar was trying to recover from its failed engine technology it also saw an uptick in warranty costs while its competitors gained ground in the industry. Company officials had to make numerous changes, including buying some engines from a competitor and switching technologies on its own engines to meet EPA standards. The company also closed some facilities to cut costs.

The turnaround has been difficult, but the company has made progress and expects to become more financially stable this year, Clarke told investors this week.

“Recovering market share hasn’t happened as quickly as we had hoped, but volume is coming back, especially as customers gain experience with our new products,” Clarke said.

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