The first shoe dropped Monday (Aug. 28) at Navistar International Corp., landing heavily and putting investors and employees on alert for deep structural changes at one of the oldest companies with a Chicago pedigree.

As reported by the Naperville Sun-Times, under pressure from activist shareholders and with a cash burn rate one analyst called “atrocious,” Lisle-based Navistar installed an outsider as its chairman and “interim” chief executive and announced the abrupt retirement of its top officer, Daniel Ustian. Ustian, 62, had been with the company for 37 years, becoming CEO in 2003 and chairman in 2004.

Lewis Campbell, named to succeed Ustian, comes to the engine and truck manufacturer from Textron Inc., where he was chairman and CEO. Campbell, 66, also spent 24 years in product design and engineering at General Motors Co.

Navistar also said it was promoting Troy Clarke, 57, another former GM executive who joined Navistar in 2010, to president and chief operating officer, the company’s top day-to-day role.

Analysts said the appointments indicate the board’s willingness to entertain bold steps in righting the company. They also repudiate an engine-emissions technology that Ustian championed but that never got clearance from federal regulators.

As a result, Navistar has been forced to buy high-cost engines from a competitor, Cummins Inc., that meet standards for the emissions of nitrous oxide.

Also part of Ustian’s departure were a $172 million loss the company reported for its second quarter and its Aug. 2 revelation that the Securities and Exchange Commission is investigating its accounting. For investors, it was an unpleasant reminder of an accounting probe from 2007 that got the company’s stock pulled from the New York Stock Exchange for 16 months.

Likely next steps for Navistar, analysts said, are layoffs as the company turns its attention to its high costs. Sales of certain operations or a deal for the entire company also are possible.

“Near-term, the next six to nine months are critical as Navistar brings new products and technology to market,” said David Leiker, who follows the company for Robert W. Baird & Co. Inc. He has a neutral rating and a $25 price target on the stock.

In Monday’s trading, Navistar shares rose 34 cents, or 1.5%, to $23.32. The shares are down 42% over the last 12 months.

“The business will shrink. I think they will get rid of a lot of tangential things they have been manufacturing,” said Basili Alukos, analyst at Morningstar Inc. He said the management changes are important to the company’s turnaround and noted that while it exhibits an “atrocious” cash burn rate, it has secured $1 billion in financing from a group of banks.

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