LISLE, IL. — After an adjusted loss of $137 million for the second quarter, Navistar is making some serious management changes.

The main drivers for the loss was a warranty reserve to repair 2010 and 2011 trucks coupled with their struggle to develop a 13-liter engine that meets U.S. Environmental Protection Agency (EPA) certification. Navistar's CEO Dan Ustian said they are working tirelessy with the EPA to find a solution.

"We've identified a path for delivering strong profits in the second half of 2012," Ustian said. And part of that path are some key management changes.

Troy Clarke, currently president of Navistar Asia Pacific, will assume responsibility for all Navistar's operations in the newly-created role of President, Truck and Engine, under which the Truck, Engine, Parts, Product Development and Purchasing organizations will integrate and work towards delivering better quality products and services, the company said.

Jack Allen will become president of North America Truck and Parts, an expansion of his current role, and Engine Group President Eric Tech will expand his role to become president of Global Truck and Engine, overseeing business operations outside of North America.

Dee Kapur, president of Navistar’s truck group, was named vice chairman and chief product officer, a Navistar spokeswoman told Bloomberg.com

The changes will take effect July 1.

"I am confident that our new management structure will lead to greater planning and execution around our integration strategy, further enabling us to deliver enterprise-wide profitability, leverage assets more effectively, streamline decision making and bring renewed energy to our team," Ustian said.