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Campbell: 'You're Going to be Amazed at the Progress You See at Navistar'

Dec. 11, 2012
In an exclusive interview with IndustryWeek, Navistar CEO Lewis Campbell reflects on his first few months leading the company, and explains why he sees a bright future ahead.

Lewis Campbell is no stranger to turnarounds. After a 24-year career with General Motors Co. (IW 500/4), Campbell engineered the dramatic transformation of Textron Inc. (IW 500/100) in the 2000s, one that even Textron describes as a reconstruction of "the very DNA of the company."

From that perspective, it made all the sense in the world for Navistar International Corp. (IW 500/86) to lure the 66-year-old out of retirement in August to steer the commercial-truck maker in the right direction, after the company veered terribly off course in its efforts to meet EPA engine-emissions regulations.

Campbell, though, asserts that Lisle, Ill.-based Navistar isn't nearly as big of a reclamation project as he thought it would be.

"I didn't know what I was going to find there. I didn't know whether I was going to need to use a whip or what," Campbell says. "And I found a group of employees who were so anxious to do what they knew how to do that the progress we're making now is amazing.

"But I can't really take credit for it. It was already there. It was like a pent-up energy that was ready to be unleashed."

Putting Out Fires

Still, Campbell's first order of business was -- and continues to be -- making the company's diesel engines compliant with EPA regulations for nitrogen-oxide emissions.

Navistar eked out an $84 million profit in the third quarter -- a far cry from the $1.4 billion it made in third-quarter 2011 -- and was hit with $10 million in EPA fines for noncompliance.

In October, Navistar announced that it had reached an agreement with Cummins Inc. (IW 500/64) to equip International-brand Class 8 trucks with Cummins engines and selective catalytic-reduction-based emissions-after-treatment systems to meet EPA regulations.

The first International truck equipped with the Cummins ISX15 15-liter diesel engine and SCR-based after-treatment system rolled off the production line on Nov. 15 at Navistar's Escobedo, Mexico plant. The International ProStar+, which will combine Navistar's MaxxForce 13-liter engine with Cummins SCR technology, enters "initial pilot production" in March 2013.

The rest of Navistar's heavy-duty trucks will shift to SCR technology "in a phased launch throughout 2013 based on volume and customer demand," Navistar said in November.

In the meantime, Navistar says it will rely on "earned emissions credits and/or non-conformance penalties" to comply with EPA regulations.

"We had to settle some things down, so to speak, so that we could get into the cadence of normal operations," Campbell says of his first few months as CEO. "We've been pretty focused on creating an operating plan for our 2013 fiscal year [which began in November], which we've done.

"We wanted to get that in place and begin to inspect each one of the elements of that plan to make sure we're on track."

Lean Will Play a Role

Much like his tenure at Textron, the cadence of normal operations under Campbell at Navistar includes weekly meetings with Navistar's top senior executives and monthly meetings with the company's more than 250 top managers, which are designed to address "issues and opportunities" and to get "roadblocks out of the way for people to do their work."

"And I would foresee us forming some kind of group, as I've done in the past, where constituencies from all functions would come together, understand what we have in place at Navistar and then decide if it needs more attention, if it needs fixing, if there are things we can add to it or if we can use it the way it is," Campbell explains.

It's safe to say that such a group will lean heavily on continous-improvement strategies. Campbell's crowning achievement at Textron was spearheading the 2002 launch of Textron Six Sigma, a companywide continuous-improvement system that's still in place today.

When he arrived at Navistar, Campbell says he found "pockets of lean," although he asserts that Navistar's lean processes aren't "robust enough to move quickly across the entire company."

Still, he emphasizes that lean will play a role in the company's turnaround.

"[Navistar's lean system] is good, and you don't have to be bad to get better," Campbell says, dusting off a mantra that dates back to his days at Textron. "But I think we need to improve it."

The good news, he adds, is that implementing a continuous-improvement operating system at Navistar might not be the massive undertaking that it was at Textron.

"We have good underpinnings at Navistar for sure," he says. "Still, it's not easy. But it's worth the trip."

'A Spooky Match'

Campbell emphasizes that he performed his due diligence before accepting the offer to lead Navistar, and despite not knowing anyone inside the company, determined that "the match was spooky."

"During my GM days, I spent two years or so at GMC Truck, and I managed all of their dealers nationwide," he explains. "So I know dealers. I know dealer councils. I respect dealers. I understand how their business model works.

"I was on the board of the Volvo-GM heavy-truck joint venture for a while, so I dabbled a little bit in heavy trucks. Textron had Textron Financial Corp.; Navistar has Navistar Financial Corp. There were just a host of different issues that Navistar had that I'd seen before."

Campbell also points to his experience working with unions.

"I know the UAW well," he says. "We have a good union work force in some of our factories, and that's fine with me."

Even so, Navistar initially referred to Campbell as its "interim" CEO, which led some to question Campbell's commitment.

"I wish we'd never used that term, because some people who read that -- we don't use it anymore -- would ask, 'Oh, how many days? Are you working part-time?'" Campbell recalls.

In response, Campbell asserts that his work hours are more like "24/7, if that's the part you're thinking about."

Campbell notes that he and his wife recently bought a house in Hinsdale, Ill., about 25 minutes from Navistar's headquarters in Lisle.

"So I am all in, and glad that I am," he says.

"You're going to be amazed at the progress you see at Navistar. It's a company that I think you'll see turn the corner much more rapidly than most people would guess."

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