US: Navistar halts production of Ford Super Duty diesel engines
Tuesday, February 27, 2007, AutomotiveWorld.com
Navistar International says it has ceased production of the diesel engines that it supplies for Ford's F-Series Super Duty pickups, following a contract-related dispute between the two companies.
Last month, Ford sued Navistar for allegedly failing to meet the terms of a long-standing supply contract and for not complying with its warranty-sharing obligations.
Meanwhile, a report by MarketWatch says that the move to suspend diesel engine output may interrupt Super Duty truck production at Ford. About 70% of the 300,000 Super Duty trucks that Ford builds annually are fitted with diesel engines, according to the newswire.
However, Ford's spokeswoman Becky Sanch said that the OEM has sufficient inventory to support production for the near term. Sanch further noted that both companies are trying to resolve the issues relating to the dispute, but refused to provide details.
According to Ford's lawsuit in January, Navistar threatened that unless Ford paid the price it demanded, the supplier would refuse to ship the engines to Ford. Such a move would breach the supply agreement between the two companies, it is claimed. The contract lasts until 2012.
Meanwhile, the newswire noted Navistar's spokesman Roy Wiley as claiming that the OEM has not been paying the engine supplier "according to the terms of the contract." Navistar stated that "it pays its suppliers and employees under contract terms and that it expects Ford to honour the terms of its agreement."
The supplier further noted that production of its recently launched 6.4-litre Power Stroke engine at its facilities in Indianapolis, Indiana and Huntsville, Alabama, will be stopped immediately. The Huntsville operation will however, continue to manufacture engines for other customers, Navistar noted.
Navistar's International Truck and Engine Corporations has been supplying diesel engines for Ford's Super Duty trucks since 1979.
Published on Tuesday, February 27, 2007
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