January 2014, TruckingInfo.com - WebXclusive
HDT: Would you say in the past that perhaps the communication with outside agencies and dealers was not what it should have been?
Kozek: I would say that. We were fighting with the EPA, and I don't know that we always had real strong collaborative relationships with our dealers.
HDT: What do you feel you've brought to all this?
Kozek: Being in the industry for 26 years, I've seen a lot of things and know a lot of customers. I think that really helps. I think I bring a knowledge of some of the disciplines that really made Paccar a very good company and I want to bring those to this company. And thirdly I think I've got fairly decent relationships with our supply base, and that carries over so we can have some frank discussion and do things a little differently.
HDT: What are your priorities for the next six months to a year?
Kozek: Profitability is one, market share is two, and then continue to roll out our products with SCR solutions.
HDT: Do you think most of the cost-cutting is over, or is there still more to be done?
Kozek: We have done [a lot], we really have. It's been painful. Obviously we've got fewer people here than in the past, but we're making smart, disciplined decisions about every dollar that we spend. We want to make sure there is a return for that dollar. In a lot of cases it's making us a much better company, and that's good for our long term.
HDT: How do you go about rebuilding Navistar's reputation, which took a beating during the whole debate over EGR vs. SCR?
Kozek: That's one of those things, it's every day. You're in front of that customer and you explain to them the situation, they know for the most part the situation, [they see] we're doing a really good job of taking care of their EGR vehicles, then you move on to what are we doing with our new producs.
With some customers it's going to take a little more. Maybe a demo program is what they need to regain the trust. Maybe they need to try five to 10 before they get into that big bill. We've had some customers, God love 'em, who say, 'I'll take 250 of your engines,' and thankfully things have worked out really well. I think we've done a good job with the engineering of our current products.
We need to restore our reputation in the market. It takes time but I think we're doing a lot of the right things.
HDT: How far along is Navistar with its “campaigns” on the EGR-only MaxxForce diesels?
Kozek: We continue to improve those EGR engines. We've had a number of field campaigns; we've had a number of calibration changes to improve performance and fuel economy. Engine calibrations are something in our industry that's just going to continue. Everybody has 'em, and it generally improves the performance of the vehicle.
So we had all those and we're spending a lot of time informing our customers of all the changes we made and how these engines might operate a little differently and this is how you need to drive them correctly. Our competitors have the same issue; today's engines drive differently than a truck that was built in 2007, for example.
HDT: Freightliner knocked International off its medium-duty market share throne this year. How do you get it back?
Kozek: We basically had lost all the leasing companies, the big leasing companies that make up a large percentage of the medium-duty business. So we've gone out and rekindled those relationships and we've gotten some business through that. Again it's going to take a little bit of time, and we're going to show our customers that our new products are as good as anybody's in the industry.
HDT: Obviously the whole emissions thing has taken a great deal of Navistar's time and effort over the past couple of years. What are some projects that may have been put on the back burner that you may now be able to put some more attention into?
Kozek: We spent an enormous amount of time, money and energy in the last three years on engines, and we haven't updated our vehicles as much as we should have. We're spending a lot more money on that. We're going to be getting into natural gas vehicles and doing the engineering for those. Certain segments of the market that we haven't had the product to compete in, we'd like to get back into those as well.
HDT: Can you give an example?
Kozek: I guess I would focus more on the vocational end of things. Those are a lot longer term issues, because it takes time; oil and gas vehicles, the refuse vehicles, the ones that just take a little bit more engineering, those are projects that are going to take longer term.
My point is we're going to spend a lot more time, energy, money and resources on truck things vs. engine things.
CORRECTED to indicate earnings were fourth quarter, not third quarter. We apologize for the error.
March 2013: Navistar's Clarke Talks Change, Opportunity, Turnaround
August 2012: Navistar Details Product Changes, Thinking Behind Emissions Strategy Change