Navistar International Corp. shuffled its senior management Wednesday, naming long-time sales star Michael Cancelliere as president of its truck and parts business and designating his predecessor William Kozek to head the company’s emerging technology strategy.
The moves come as the truck manufacturer introduces updated models such as its International LT line and works to recover lost market share.
“These leadership and structural changes will bring even greater focus to several critical revenue areas of our business,” said Troy Clarke, Navistar’s chairman and chief executive.
Navistar also appointed Bernardo Valenzuela to the newly created role of vice president of export, and president of Mexico and Global Operations.
Kozek, 54, will focus on vehicle electrification and potential disruptive technologies, Clarke said.
“Bill stepped in during a challenging time for our company four years ago and did a great job steadily rebuilding the International Truck brand, restoring confidence and improving consideration with customers,” Clarke said.
The Lilsle, Ill., truck and bus builder is still recovering from a wrong bet on diesel-exhaust technology to meet federal standards for nitrogen oxide emissions.
The company attempted to introduce trucks that used a pollution-cutting technology known as gas exhaust recirculation. But the technology also created reliability and fuel economy issues for its trucks and tarnished the manufacturer’s reputation. Sales plunged, warranty costs soared and losses climbed.
“The most important thing is for Navistar to return to profitability this year,” Cancelliere told Trucks.com. “We have a lot of the underpinnings in place with our cost structure. The piece we need is the revenue. We need to sell more trucks.”
For the six-month period ended April 30, Navistar lost $142 million on revenue of $3.8 billion. Navistar lost $97 million in the 2016 fiscal year and $184 million in the prior fiscal year.
“When I look at the portfolio of products to work with, these are great trucks that our dealers are excited to sell and that customers are very interested in,” Cancelliere said. “We just need to get out in front of the customer and get them to experience it.”
In turning to Cancelliere to run the truck business, Navistar is tapping a long-time executive with extensive sales experience and a track record for profit generation.
Previously, Cancelliere was senior vice president, global parts and customer service. The parts division has logged three consecutive years of record operating profits, including $640 million on sales of $2.4 billion for Navistar’s 2016 fiscal year. During the same period, its core truck and bus manufacturing business lost $189 million on sales of $5.4 billion.
Cancelliere, 58, will report to Persio Lisboa, Navistar’s executive vice president and chief operating officer.
He is well regarded in the industry, especially among the dealers who are critical to Navistar’s sales efforts.
“Michael is always somebody who speaks his mind, but is willing to listen to what your opinion is and always finds some common ground that works for both parties,” said Dick Sweebe, a partner at Summit Truck Group of Lewisville, Texas.
“He’s had a huge impact on the parts group and has been the shining star for the past couple of years from a profit standpoint,” Sweebe said. “They’ve done the heavy lifting for Navistar as they worked through their emissions issues.”
He is known to be a tough negotiator.
“We negotiated hard, every single penny, every single specification of a truck,” said Bruce Zeman, vice president of facilities and equipment at NY Waterway, headquartered in Weehawken, N.J. “It was stressful, but in a good way.”
Cancelliere, a Long Island, N.Y., native has spent his entire career with Navistar, joining its International Trucks division as a sales management trainee in the Buffalo, N.Y. office 37 years ago.
The office was so remote, “the company could have been out of business for two weeks before somebody would have called or faxed us,” Cancelliere told Trucks.com. “We just called customers and sold trucks.”
And that was something Cancelliere took to.
He sold 45 trucks in his first year and was the only trainee in the company’s 1980 class that asked to move from the training program’s $17,500 salary to commission-based compensation.
“Being on commission I made $43,000,” Cancelliere said.
At age 23, Cancelliere became a national account manager – the youngest in the company. His counterparts were seasoned sales pros in their 30s and 40s.
He recalls working the New York metropolitan area, initially calling on 10 customers in the region.
“It was Pespsi, Nabisco and others,” Cancelliere said. “The only thing they had in common was that none of them bought International Trucks. All became conquests.”
Cancelliere sold 200 trucks that year, including 106 trucks to a company that was later absorbed into Linde Industrial Gases.
“People ask what is the secret of success. It is two words, ‘hard work.’ There are no short cuts.” Cancelliere said.
The truck business is pretty basic.
“Nothing happens until somebody sells something,” he said. “The number one reason that we didn’t sell a truck in 1980 is the same as 2017. We didn’t call on the customer.”
After that, it is incumbent on sales people to develop relationship with customers.
“Make it easy for the customer to do business with you,” he said. “You want to be the one who solves their problems. Know your product, know your customer, know your competition. This is just the fundamentals.”
Cancelliere’s favorite business aphorism? “Persistence overcomes resistance 100 percent of the time,” he said.
He remembers pitching Gross & Hecht, a now defunct food hauler in the East Coast. They only ran Mack and Volvo trucks and his previous International Trucks sales counterpart would just put a business card in the mail to the chain’s chief executive and hope to get a call back.
Cancelliere called and wrote the chief executive so often that he eventually heard back.
He offered Cancelliere an order for five trucks if he would stop badgering the company, saying “you are disrupting our operation in your quest to sell trucks.”
They reached a deal and eventually Cancelliere converted the fleet to all International Trucks.
He turns his contacts into friendships, according to current and former Navistar dealers.
“Michael has a deep sense of integrity and is passionate about succeeding,” said Oscar Horton, chief executive at Sun State International Trucks in Tampa, Fla.
Cancelliere, who is married and has a blended family of five children, does spend time outside of work. He likes John Grisham novels and running. “It clears my head,” he said.
He’s not much into golfing or fishing, choosing instead to spend that time with his family.
Cancelliere said he appreciates the opportunities provided by Navistar.
“I never had a bad boss over the years,” he said.
Now he’s in a position to have people say the same about him.
The strategy, Cancelliere said, will be “trying to understand what it is like to be a good leader and help motivate and encourage people to achieve things they thought they never could.”
Editor’s note: Trucks.com staff writer Clarissa Hawes contributed to this report.