Navistar sent a tremor through the trucking industry in June when it hired Bill Kozek, formerly general manager and vice president at Peterbilt, to be its new president of North American Truck and Engine Business.
I got the chance to talk Aug. 6 with Kozek on the phone on why he decided to take on a new position at a company that has struggled with technology issues over the past several years, the challenges and opportunities he faces and what he hopes to accomplish in his new role.
Q: Hi Bill! How’s it going in your new position?
Kozek: I’m well. I took a month off between my jobs – which I highly recommend, by the way. And I’ve since hit the ground running. I’m learning a lot and it’s been fun so far. We’ve obviously got our issues. But we’re working through them and will continue to do so.
Q: When Navistar announced you as its new president, the general consensus in the industry was, “This is a good fit.” That said, what attracted you to this job?
Kozek: A lot of things, actually. Navistar is a great organization with a great heritage with a lot of great people working for it. And I’d had 26 great years at PACCAR. It was a great experience at a great company. I have a lot of friends there, still. But I knew that if I was ever going to be part of a turn-around, this was my shot. And that aspect was very appealing to me.
Also, (Navistar CEO) Troy Clarke’s vision of the company and where he wants to take it really appealed to me. I knew from my years at PACCAR that selling against the ProStar+ was always difficult. So I knew the products were solid. And it’s a given that the dealers were strong and remain strong.
So, all the way around, I thought it was a good fit. And that’s why I’m here.
Q: What current “hotspots” have you identified as your top priorities and what can you tell us about your plans to deal with them?
Kozek: Our top priority now is to restore International’s reputation in the marketplace and regain the sales momentum we had before the 2010 emissions problems. That’s it, plain and simple.
And how we do that is by visiting our customers day in and day out and showing them the new ProStar+ with either the Cummins ISX15 or the MaxxForce 13 engines with selective catalytic reduction.
And by doing that, we can restore customer confidence and demonstrate to them that we provide the lowest cost of ownership proposition in the industry today.
And really, if you want me to be honest, that simple mission is really my first, second and third priorities today.
Q: Customer confidence was clearly shaken over the past several years. As a result, Navistar has vowed to be more transparent and take an aggressive track forward to repair both technological issues and mend fences with fleets and Class 8 customers. Do you agree with approach and will you expand (or dial back) these efforts in any way?
Kozek: Yes. Again, the short answer is that if we want to restore our reputation, we’ve got to be open and honest with market dealers, suppliers and customers.
I’m a big fan of being transparent and getting open lines of communication with all those stakeholders I just mentioned. At the end of the day, they have to believe in us. And we believe that is the way to improve our position – and we believe that is the best the way to improve our position going forward.
Q: Have you been out talking to fleet and Class 8 customers, yet? If so, what are you hearing from them in terms of concerns and how are you preparing to address those concerns?
Kozek: I always get the same question: What were you thinking?! (Laughs)
But I always give them the same answer: I wanted to be here at International and I’m glad to be here.
But, you know, what I hear over and over again is that they really want Navistar to be successful. And they want our products to be good and they ultimately want our products.
And we’re out there now with our Cummins option and our Cummins SCR solution. And we’ve got seed units running successfully in fleets now. And it’s really refreshing to be standing in front of them with a good story to tell and not have to apologize for the products we’re selling today.
Again, even at the height of our woes, our customers never stopped pulling for Navistar. And at the end of the day, they know Navistar is here to take care of their trucks. Our customer service is the best in the industry.
And our dealer network – one of the main reasons I’m here today, by the way – is very strong in both numbers and quality.
So we’ve got a lot of good things to talk about today when I’m out with our customers.
Q: What have you learned about Navistar since your arrival that has been a surprise to you?
Kozek: I think the thing first and foremost that struck me was the level of customer service Navistar has. I was not aware of how strong that aspect of our business is. Our dealers are the best when it comes to making repairs from A to Z and unmatched making sure both the customer and the driver are ok.
The other pleasant surprise was the number of hard-working people here that truly believe in Navistar really want to see us succeed. They’re smart people. They’re dedicated. And it’s definitely a team atmosphere. And it’s very exciting for me to be part of a team that can turn around a company the way we’re going to. And I can’t be more pleased that these dedicated employees are willing to stick with us.
Q: Moving on to some more specific industry issues, what are Navistar’s expectations for natural gas truck sales in the next few years?
Kozek: We are optimistic about natural gas. It’s still a very small part of the overall market. But we see that growing as products get more reliable.
Again, our primary focus at the moment is our SCR implementation efforts. But we will be offering the ISX12 G soon. Not tomorrow, but in the near future.
At the end of the day, the product has to be reliable. And today, when you talk to some fleets that have experimented with natural gas, you get a less-than-ringing endorsement. But as the products get more and more reliable, we think there is a part of the market that is ready for natural gas and ultimately it could be a more significant part of the market.
Q: How have customers received the return of Cummins engines to International trucks?
Kozek: It’s been nothing but positive. You know, from 2008 to 2010, ProStars equipped with the Cummins ISX was the best-selling engine in the industry. So we’re not surprised to see very favorable response to this move from our customers.
We have a very good relationship with Cummins. We always continued to buy engines from them for our Mexican market. And although things may have gotten a little strained at one point, that relationship is strong today.
Q: How are dealers handling Cummins engine and after treatment components in their service departments?
Kozek: The progress there is strong. It’s been a little bit of a work in progress getting our technicians up to speed on the ISX with the SCR configuration. But most of our technicians are familiar with that engine. So overall, it’s been a minor blip on the radar screen to integrate our dealers and technicians with that product.
Q: What segments of the vocational market hold the most opportunity in the coming years for truck sales?
Kozek: The vocational truck market – along with housing starts and auto production – should get better and better as time goes on.
Government is still a big part of business, as is municipalities and utilities. And we’d like to see more volume on the construction end as well.
To that end, we’d also like to grow our business with Caterpillar and their C-Series trucks.
Q: Speaking of that, what is the status of, and how you would characterize the status of the company’s truck agreement with Caterpillar now and going forward?
Kozek: That relationship is still good. The sales numbers are growing. They’ve got a strong family of vocational trucks and it continues to grow. We need to continue to add options to them. But it’s a really strong relationship and we’d like to see new products added to that line.
Q: Is Navistar in a position yet to be looking past the implementation of SCR technology into its Class 8 vehicle line to new products or technologies? Any suggestion on what the focus for Navistar will be once the integration of SCR throughout the product portfolio is complete?
Kozek: As you know, we displayed our concept Project Horizon ProStar+ at the Mid-America Trucking Show. It has a lot of updates and refreshments to the ProStar interior and exterior. And we’re moving forward with that project.
It’s all about improving the environment for the driver. So we want our products to always be getting better. We spent a lot of time and money working on engines over the last few years. And I think now it’s time to start working on the trucks themselves again.
Q: What is the status of Navistar’s medium-duty business and do you see any opportunities for growth there?
Kozek: Medium duty is huge for us. And we have a little work to do. We have lost some marketshare and we need to see now how to get that share back.
At this point I can tell you that we will be adding Cummins SCR solutions to our medium-duty engines. And we’re looking at other initiatives to shortly turn that tide around.
Q: Paccar has a medium-duty presence, of course. But International has a range and breadth of medium-duty products that is unmatched in the industry. Is there a little bit of a learning curve here for you to get up to speed on?
Kozek: That’s an interesting question. Yeah, a bit of a learning curve. You know, at Navistar, the philosophy is, “Let’s build a medium-duty truck from the ground up.” And I think that’s how we’ll move forward. That strategy is a good investment for us. Medium duty is lucrative for both our dealers and our customers. And we need to make sure moving forward that we’re doing the right things in terms of products to keep both dealers and customers happy.
For me, the real learning curve has been buses. A few months ago, I didn’t know anything about buses. But I’m an expert on them, now! (Laughs.)