Navistar International Corp. said Monday it is suspending production of a diesel engine it builds for Ford Motor Co. because Ford has stopped honoring contract terms. Ford uses the engines in its heavy-duty pickup trucks, and Navistar has been an engine supplier to Ford, the No. 2 U.S. automaker, since 1979, Navistar said in a statement. Ford sued Navistar in January in a Michigan state court over a contract dispute regarding warranty costs and engine prices for the 6.4-liter engines, Bloomberg reported. Navistar is Ford’s sole supplier of the engines, called Power Strokes The engines are produced at Navistar plants in Huntsville, Ala., and Indianapolis. A company spokesman said the Indianapolis plant will be idled starting Tuesday, Bloomberg reported. Navistar is the parent company of International Truck and Engine Corp., which makes heavy-duty engines. By Transport Topics
Ford to Repay Navistar $80 Million Ford Motor Co. will repay Navistar International Inc. $80 million as part of a deal that will ensure continued supply of diesel engines for its Super Duty pickup trucks in the immediate future, The Associated Press reported. Ford had debited about $160 million from Navistar invoices as part of the dispute over warranty and pricing issues, AP said. An agreement reached last Thursday and released Friday by a Michigan circuit court judge requires Ford to transfer $80 million to Navistar by today. The auto maker can pursue a return of the $80 million through its ongoing lawsuit, AP said. Ford sued Navistar in January in Oakland County Circuit Court in Michigan, citing the warranty and pricing issues. Ford has argued that its contract with Navistar states Ford may debit invoices, while Navistar disputes that claim, AP said. Navistar stopped shipping the Power Stroke diesel engines to Ford, prompting the auto maker to go to court to force Navistar to continue deliveries, AP said. The two companies have agreed to a consent order under which Navistar will continue shipping engines to Ford, and the auto maker will not debit Navistar's invoices, AP said. L&MT
