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Navistar International (NAV)
Q3 2012 Earnings Call
September 06, 2012 10:00 am ET
Heather Kos - Vice President of Investor Relations
Lewis B. Campbell - Executive Chairman and Interim Chief Executive Officer
Andrew J. Cederoth - Chief Financial Officer and Executive Vice President
Troy A. Clarke - President and Chief Operating Officer
John J. Allen - President of North America Truck
Archie Massicotte - President
Henry Kirn - UBS Investment Bank, Research Division
Jerry Revich - Goldman Sachs Group Inc., Research Division
Stephen E. Volkmann - Jefferies & Company, Inc., Research Division
Andrew M. Casey - Wells Fargo Securities, LLC, Research Division
Robert Wertheimer - Vertical Research Partners Inc.
Brian Sponheimer - Gabelli & Company, Inc.
David Leiker - Robert W. Baird & Co. Incorporated, Research Division
Michael Shlisky - JP Morgan Chase & Co, Research Division
Timothy J. Denoyer - Wolfe Trahan & Co.
Vlad Bystricky - Barclays Capital, Research Division
Previous Statements by NAV
» Navistar International Management Discusses Q2 2012 Results - Earnings Call Transcript
» Navistar International's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» Navistar International Corp. - Analyst/Investor Day
Good morning, everyone, and thank you for joining us for Navistar's Third Quarter 2012 Conference Call. With me today are Lewis Campbell, Navistar's Chairman and Interim Chief Executive Officer; Troy Clarke, our President and Chief Operating Officer; and A.J. Cederoth, our Chief Financial Officer.
Before we begin, I'd like to cover a few items. A copy of this morning's press release and the presentation slides that we will be using today have been posted on our Investor Relations website for your reference. The non-GAAP financial measures discussed in this call are reconciled to the U.S. GAAP equivalent as part of the appendix in the slide deck.
Finally, today's presentation includes some forward-looking statements about our expectations for future performance. Actual results could differ materially from those suggested by our comments made here. For additional information concerning factors that could cause actual results to differ materially from those projected in today's presentation, please refer to our most recent reports on Form 10-K and 10-Q and our other SEC filings. We would also refer you to the safe harbor statement and other cautionary notes disclaimer presented in today's material for more information on the subject.
And with that, I'll turn the call over to Lewis.
Lewis B. Campbell
Thank you, Heather, and good morning, everyone. Many of you know me from my days at Textron, and I'm really looking forward to working with each of you again. I am probably new to most of you, however. So I hope to get out in the next month or 2 to meet as many of you as possible.
Probably on your mind this morning is you're probably wondering how I landed here at Textron -- Navistar. I knew I'd say that. I've only been at Textron for almost 18 years. So I'd like to take a moment to explain.
After retiring from my former company, I recently received a call saying that I was being considered for the job here at Navistar. I was obviously very surprised to get the call, but I was very intrigued by the opportunity to join what I believe to be a very important American icon. You know there are not many times in life that you can come into a company with such a rich history and have the opportunity to help a great team shape the future in an important way. So after a lot of careful study, consideration and due diligence, I agreed to come onboard. And it's an honor to be given this opportunity. And you can be assured that I am and will continue to be 110% committed to Navistar, our leaders and our employees, our dealers and our business partners and, most importantly, to our shareholders.
My wife and I actually finalized an offer on a home here in the area over the past weekend. So as they say in poker, I am all in. Look, there's no doubt that we have as some would say some really big boulders in the stream. But as you can imagine, I did plenty of due diligence. And while there are a host of issues that need to be resolved, there was nothing I felt was unsurmountable when deciding whether or not to pursue this opportunity. In fact, regarding the issues we face, I was pleasantly surprised how well the experiences and sometimes scars I received at GM and Textron have prepared me to tackle the challenges we face. And on the positive side, what I learned in this due diligence process is that we have a strong management team with good operations, great products and a strong dealer network. I think we can all agree that Navistar is a great company. I believe that Troy Clarke is the perfect choice to be our President and Chief Operating Officer.
I was also pleasantly surprised when I got here to find out that Troy and A.J. and their teams had already begun work on each of the critical issues we face. And we are already finalizing a strong 18-month operating plan that we'll be putting in place throughout the balance of Q4, and I believe we'll have the proper metrics, including ROIC, put in place to help ensure our success. But I do believe we have to accelerate the pace of progress on the improvements needed so that we can quickly resume our rightful place as a profitable leader in the industry.
Let me emphasize that North American truck engine and parts are our core businesses. They will get the lion's share of focus for the foreseeable future. And while the fundamentals of the plan are there, we need to sharpen our focus so our plans become a reality.
I've broken down our plans into 6 key areas. First, improving quality. Quite simply, we need to step up the pace and address our problems as quickly as we can. Troy and A.J. will talk more about that in a minute, but basically, we have to be known in the future as the highest quality truck producer on the road.
Second, great products. This company is blessed with many great products. The ProStar is a phenomenal truck. You can be sure that we intend to continue to develop leading-edge products that will truly satisfy every one of our customers' needs.
But let me pause for a second. We had a great idea with our EGR-only emission strategy and while some would say we came very close, it didn't work out as completely as planned. Obviously, there are a lot of great trucks on the road today using that technology, but for the future, we know exactly what we need to do to implement our SCR-based clean engine transition. We're dedicated to hit each of our launch target dates. And we believe that as we begin to implement our clean engine strategy, we will begin to regain our rightful market share and eventually add to it.