Navistar International Corp. back to producing diesel engines for Ford Motor Co.
On 26th February 2007, Navistar International Corp. decided to suspend production of diesel engines for Ford Motor Co. since Ford did not honor contract terms. Navistar is the parent company of International Truck and Engine Corp., which makes class 4-8 heavy-duty engines. Navistar has been supplying engines called Power strokes for Ford’s heavy-duty pickup trucks since 1979. In January, Ford and Navistar had a dispute regarding warranty costs and engine prices for the 6.4 liter engines and Ford filed a suit against Navistar in a Michigan state court. Navistar produces Power Strokes, the engines for Ford’s heavy duty pick up trucks at its plants in Huntsville, Ala., and Indianapolis. Starting Tuesday, they planned to idle their Indianapolis plant.
Now, just three days after it decided to suspend producing the engines for Ford, Navistar has said it will resume production as a result of a court order from a Michigan judge where Ford filed the suit against Navistar. The court order instructed Ford Motor Co. to pay, without deductions, for all diesel engines it receives from Navistar.
Ford has been using Navistar diesel engines for a while now. A few weeks ago Ford introduced their 2008 Super Duty F-Series. The 6.0L V-8 in the last generation of the Super Duty caused Ford a lot of problems as a result of which they sued Navistar last month to recover some of the warranty costs they incurred on that engine. They claim that Navistar is not sharing these costs, and hence had to hold back payments – resulting in Navistar stopping production for Ford.