Investor Carl Icahn, who owns just less than 15 percent of its stock, criticized Navistar’s board of directors for not consulting with him and other major stockholders before appointing its new chairman and CEO.
In an open letter to the board released on Sunday, Icahn said the board’s failure to consult with the four majority stockholders that combined own nearly 60 percent of the stock, was “outrageous.”
“I am writing this letter to express my grave concern about the future of Navistar, a company that, in my opinion, has become a poster child for abysmal business decisions and poor corporate governance.” Icahn cited the company’s three-year committment to Advanced EGR and its change in direction to SCR.
Navistar was quick to respond, releasing the following statement early Monday morning:
“The Navistar Board takes its fiduciary duties very seriously and is committed to acting in the best interest of the Company and all of its shareholders. Navistar has recently taken a number of important actions, including appointing new leadership, defining and beginning to implement a new clean engine solution, accelerating cost reduction actions, and undertaking a review of its non-core businesses, all with the goal of driving long-term profitability and delivering shareholder value.
“Navistar maintains an ongoing dialogue with its shareholders, and appreciates their input and views. As such, after a year of dialogue, we are extremely disappointed that Mr. Icahn has chosen to pursue his unproductive tactics of threats, attacks, and disruption rather than continuing constructive engagement, particularly at this important time for Navistar. Rest assured, the Board and management have a clear path forward and are focused on executing on their plan and delivering value to shareholders.”
Icahn threatened litigation and a proxy fight if his demands were not acted upon. “I am sure that you have no doubt that I will proceed with both, if necessary, to protect my investment and the interest of all shareholders,” he wrote.