Photo courtesy of Navistar

Navistar rolled out the new TerraStar 4x4 this month at the Work Truck Show.

Truck maker Navistar International Corp. has named Chief Operating Officer Troy Clarke as the company's next chief executive officer.

He will replace interim CEO and Chairman Lewis B. Campbell, who predicted that the company's "return to profitability is clearly in sight" after the company's first-quarter loss was less than expected and cash generation exceeded expectations, easing concerns about Navistar issuing a possible bankruptcy filing.

The transition, which is occurring sooner than many industry observers expected, follows a failed engine-emissions strategy pursued by former Chairman and CEO Dan Ustian, who was shown the door and retired last year.

Ustian thought customers would rather use an advanced exhaust-gas recirculation technology that cleans emissions in the cylinders. After several attempts, Navistar failed to have the engines certified for road use. The technology path contrasted to selective-catalytic reduction (SCR), a technology that neturalizes emissions in the tailpipe and one that most other truck makers have been using. Navistar now uses SCR.

Meanwhile, Navistar Director James Keyes, a 10-year veteran of the board and retired chairman of auto-parts maker Johnson Controls Inc., will become Navistar's new chairman. The leadership changes, which were announced on March 7, will take effect on April 15.

Analysts say they are upbeat about the management moves.

Joel Tiss, a machinery-sector analyst for BMO Capital Markets, New York City, says, “We remain positive on the truck sector as we believe it is one area where there is some pent-up demand as well as a segment within the broader industrial group that has been largely ignored by investors recently."

On Navistar, Tiss is maintaining an “underperform rating," which is "owing to the current headwinds in the transition to the SCR technology.”