Commercial-truck manufacturer Navistar International Corp. (IW 500/86) has jettisoned Chairman and CEO Daniel Ustian, whose strategy to meet EPA engine-emissions regulations failed miserably.

Lisle, Ill.-based Navistar on Monday said Ustian will retire, "effective immediately," after 37 years with the company.

Coinciding with Ustian's departure, Navistar appointed former Textron Inc. (IW 500/100) chief Lewis Campbell as interim CEO, and promoted Navistar Truck and Engine executive Troy Clark to president and COO.

While competitors such as Paccar Inc. (IW 500/69) and Daimler AG (IW 1000/18) are reaping the benefits of an upswing in the truck-sales cycle, Navistar reported a $172 million second-quarter loss, which included $10 million in penalties for failing to comply with EPA standards covering nitrogen-oxide emissions in diesel engines.  
Cleveland-based analyst Brian Rayle traces Navistar's struggles back to Ustian's decision to rely solely on exhaust-gas recirculation (EGR) technology to try to meet the EPA standards, when the rest of the industry opted for a mix of EGR and selective catalytic-reduction (SCR) technology in their engines.

"This was his doing as CEO," said Rayle, who is managing director and equity research analyst for Northcoast Research Holdings LLC. "Ultimately it didn't work, and he was shown the door."