Icahn Says Navistar (NAV) Poster Child for Abysmal Business Decisions
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I an open letter to The board of directors at Navistar (NYSE: NAV) this weekend, investor Carl Icahn, who holds 15 percent of the outstanding shares, said that in his opinion the company "has become a poster child for abysmal business decisions and poor corporate governance."
"At Navistar, where four shareholders hold almost 60% of the stock,” said Ican, "it would be a simple matter for this Board to bring substantial holders together to discuss and reach a consensus regarding important decisions concerning the company that WE own. It is therefore outrageous that you have not reached out to obtain our opinion (and I assume you have not obtained the opinions of the other large holders) on issues such as choosing a new management team to lead this company. Your choice of Lewis Campbell as Chairman and Interim Chief Executive Officer was worse than ill-advised, since you made no attempt to discuss the decision with us, or presumably any of the other substantial holders -- the true owners of this company. Indeed, rather than trying to effectively communicate with shareholders regarding these significant strategic decisions, you have sought to stifle even ordinary course shareholder communication and influence by recently adopting a poison pill that is unusually restrictive. When I consider these two recent actions of Navistar, together with the history of the company, its management and its Board, which has repeatedly made poor decisions leading to disastrous results, I am led to the inevitable conclusion that Navistar is a company with a Board asleep at the switch, violating its legal obligations and trying to entrench itself to protect the fees and status of Board members, rather than to faithfully perform the primary legal obligation of a board of directors, which is to protect and enhance the investment of shareholders."
"At Navistar, where four shareholders hold almost 60% of the stock,” said Ican, "it would be a simple matter for this Board to bring substantial holders together to discuss and reach a consensus regarding important decisions concerning the company that WE own. It is therefore outrageous that you have not reached out to obtain our opinion (and I assume you have not obtained the opinions of the other large holders) on issues such as choosing a new management team to lead this company. Your choice of Lewis Campbell as Chairman and Interim Chief Executive Officer was worse than ill-advised, since you made no attempt to discuss the decision with us, or presumably any of the other substantial holders -- the true owners of this company. Indeed, rather than trying to effectively communicate with shareholders regarding these significant strategic decisions, you have sought to stifle even ordinary course shareholder communication and influence by recently adopting a poison pill that is unusually restrictive. When I consider these two recent actions of Navistar, together with the history of the company, its management and its Board, which has repeatedly made poor decisions leading to disastrous results, I am led to the inevitable conclusion that Navistar is a company with a Board asleep at the switch, violating its legal obligations and trying to entrench itself to protect the fees and status of Board members, rather than to faithfully perform the primary legal obligation of a board of directors, which is to protect and enhance the investment of shareholders."
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