Navistar Suspends Production of Ford Power Stroke® Diesel Engines

[DriVer]

<span class="ev_code_RED">Navistar Suspends Production of Ford Power Stroke® Diesel Engines in Dispute Over Commercial Terms</span>

Warrenville, Minnesota - February 26, 2007 -- Navistar International Corporation (OTC:NAVZ) announced today that it is suspending production of the Power Stroke® diesel engine that it builds for Ford Motor Company because Ford has stopped honoring the terms of agreement under which the engines were built.

Navistar's principal operating company, International Truck and Engine Corporation, has been the exclusive diesel engine supplier for Ford's heavy duty pickup trucks since 1979 and recently launched a new 6.4L Power Stroke® diesel engine that meets 2007 emissions standards while increasing performance, durability and fuel economy.

Ford, using International-manufactured Power Stroke® diesel engines, has enjoyed leadership market share of close to 50 percent for many years. Navistar believes the new Power Stroke 6.4L diesel engines provide Ford the opportunity to maintain or improve this leadership position. Trade editors who have driven Ford's 2008 F-250 equipped with the Power Stroke® have given it rave reviews.

International currently produces the new 6.4L Power Stroke® diesel engine at its engine plants in Indianapolis, Ind., and Huntsville, Ala., and as a result of the dispute over commercial terms, production of those engines at both facilities will be halted immediately. The Huntsville operation will continue to produce engines for other customers.

Navistar said that it pays its suppliers and employees under contract terms and that it expects Ford to honor the terms of its agreement.

About Navistar

Navistar International Corporation (OTC:NAVZ) is a holding company whose wholly owned subsidiaries produce International® brand commercial trucks, MaxxForce brand diesel engines, IC brand school buses, and Workhorse brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another wholly owned subsidiary offers financing services. Additional information is available at: navistar.com.

[DriVer]

<span class="ev_code_RED">Navistar Suspends Production of Ford Power Stroke® Diesel Engines in Dispute Over Commercial Terms</span>

Warrenville, Minnesota - February 26, 2007 -- Navistar International Corporation (OTC:NAVZ) announced today that it is suspending production of the Power Stroke® diesel engine that it builds for Ford Motor Company because Ford has stopped honoring the terms of agreement under which the engines were built.

Navistar's principal operating company, International Truck and Engine Corporation, has been the exclusive diesel engine supplier for Ford's heavy duty pickup trucks since 1979 and recently launched a new 6.4L Power Stroke® diesel engine that meets 2007 emissions standards while increasing performance, durability and fuel economy.

Ford, using International-manufactured Power Stroke® diesel engines, has enjoyed leadership market share of close to 50 percent for many years. Navistar believes the new Power Stroke 6.4L diesel engines provide Ford the opportunity to maintain or improve this leadership position. Trade editors who have driven Ford's 2008 F-250 equipped with the Power Stroke® have given it rave reviews.

International currently produces the new 6.4L Power Stroke® diesel engine at its engine plants in Indianapolis, Ind., and Huntsville, Ala., and as a result of the dispute over commercial terms, production of those engines at both facilities will be halted immediately. The Huntsville operation will continue to produce engines for other customers.

Navistar said that it pays its suppliers and employees under contract terms and that it expects Ford to honor the terms of its agreement.

About Navistar

Navistar International Corporation (OTC:NAVZ) is a holding company whose wholly owned subsidiaries produce International® brand commercial trucks, MaxxForce brand diesel engines, IC brand school buses, and Workhorse brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another wholly owned subsidiary offers financing services. Additional information is available at: navistar.com.

[Two Bit]

I've been a Ford buyer for decades. Ford has done some really dumb stuff lately, they need to get their act together.

I think the value of my 7.3L equipped Ford just went up though. I plan on keeping it a long time.

[RustyJC]

See my March 1 post HERE for today's legal developments.

Rusty

[Hitchhiker]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by DriVer:
Warrenville, Minnesota - February 26, 2007 </div></BLOCKQUOTE>

Old news.

[DriVer]

I initially heard about this issue from a secondary Internet website however I came across it when I was doing some research for one of our members about International Parts.

One thing I didn't know about was this:

DETROIT, Feb 28 (Reuters) - Ford Motor Co. said on Wednesday a Michigan court has ordered Navistar International Corp. to resume shipping diesel engines that power the automaker's key F-Series Super Duty pickup trucks.

Navistar this week had stopped building the 6.4 liter diesels for the Super Duty models because of a contract dispute with the automaker.

"Earlier (Wednesday) we filed a motion with the court seeking a temporary restraining order to reinstate the shipment of 6.4 L Powerstroke diesel engines to our Kentucky Truck Plant," Ford spokeswoman Becky Sanch said in a statement. "The judge granted the motion and Navistar was ordered to resume production and shipment of engines."

Ford had sued Navistar in January over warranty costs and engine prices.

[DriVer]

More News:

By Poornima Gupta

DETROIT, Feb 28 (Reuters) - A Michigan court on Wednesday ordered Navistar International Corp. (NAVZ.PK: Quote, Profile , Research) to resume shipping to Ford Motor Co. (F.N: Quote, Profile , Research) the diesel engines that power the automaker's key F-Series Super Duty pickup trucks.

Navistar this week had stopped building the 6.4 liter diesels for the Super Duty models, saying Ford had stopped honoring terms of their agreement.

Navistar is the only supplier of diesel engines to Ford's Super Duty pickup truck, one of the automaker's most profitable vehicles and a key launch this year as it tries to rebound from billions of dollars of losses in recent years.

"Earlier (Wednesday) we filed a motion with the court seeking a temporary restraining order to reinstate the shipment of 6.4 L Powerstroke diesel engines to our Kentucky Truck Plant," Ford spokeswoman Becky Sanch said in a statement. "The judge granted the motion and Navistar was ordered to resume production and shipment of engines."

Sanch said it will reduce production of the pickup trucks at Ford's plant in Louisville, Kentucky, in the coming days because of the shortage of engines.

But the plant will return to regular operation "as quickly as possible" once Ford begins to receive the engines, she added.

The order from the Oakland County circuit court said Navistar shall not take any action that causes an interruption or suspension or reduction in the diesel engines shipped to Ford.

Ford had sued Navistar in January over warranty costs and engine prices.

Navistar spokesman Roy Wiley said the supplier was informed late on Wednesday about the court order to resume shipping the engines.

Production could probably begin by Monday at Navistar's plant in Indianapolis, Indiana, and there were engines already built that could be shipped, he said.

Wiley said Ford was also ordered to pay for those engines.

"We never had anything against shipping engines to Ford, we just wanted to be paid for them," Wiley said.

Navistar had shut its Indianapolis facility, which produces diesel engines only for Ford, and had stopped producing those engines at a plant in Huntsville, Alabama. The Huntsville plant remained open.

Due to a lack of engines, the Ford Kentucky plant that produces the Super Duty truck will operate on limited shifts Thursday, be closed on Friday and resume one shift of production on Monday, Sanch said.

Super Duty trucks are the most popular vehicles in their class, averaging 50 percent market share in the heavy-duty pickup truck segment during the past five years.

Warrenville, Illinois-based Navistar has been the exclusive diesel engine supplier for heavy duty Ford pickup trucks since 1979 through its International Truck and Engine Corp.

Bear Stearns analyst Peter Nesvold said earlier this week Ford and Navistar were "tied at the hip," and if the disruption in supply extends for more than a month, it could lead to an $11.6 billion in annualized revenue loss for Ford.

Navistar produces about 400 of the engines per day for Ford, down significantly from about 1,060 per day at peak production. (Additional reporting by David Bailey in Chicago)

© Reuters 2007. All Rights Reserved.

[Miles]

this stems from fact the 6.0 caused Ford a bunch of money due to engine troubles.

[DriVer]

Ford 6.4L Power Stroke Diesel Engine

Engine dispute to cut truck sales, Ford says
Brief plant halt hits high-demand F-Series

By Robert Schoenberger
rschoenberger@courier-journal.com
The Courier-Journal


Even if Ford Motor Co. loses only a day or two of production of 2008 F-Series Super Duty trucks, this month's sales will be hurt, the automaker said.

Orders from dealerships for the Louisville-built line have been stronger than expected, and the vehicles that were on lots last month didn't stay longer than six days on average.

At the end of the month, Ford had only 12,000 of the trucks available for sale.

"The units that we have out there are turning quickly," Ford sales analyst George Pipas said. He added that there aren't enough trucks in inventory to keep up with sales and that the few days of lost production will hurt.

Ford's Kentucky Truck Plant on Chamberlain Lane worked partial shifts yesterday and is scheduled to be down today. The company hopes to be at full production next week now that Navistar International has been ordered to resume shipping diesel engines to the plant.

Navistar on Monday announced that it had stopped shipping the engines because of a dispute over Ford payments.

Pipas said the work stoppage did not affect last month's sales, but he expects to see an impact this month.

In February, Ford sold 55,251 F-Series trucks. Pipas did not release Super Duty figures, but they typically make up about 40 percent of the truck line's sales. F-Series sales fell 12 percent last month from February 2006, an improvement after a 14 percent decline in January.

Ford sued Navistar in January, saying the engine maker failed to pay for its share of recalls on the 6-liter diesel engine sold in Ford trucks from 2002 to 2007. In its lawsuit, Ford said it was withholding funds for the new 6.4-liter engine to recoup those expenses.

Late Wednesday, a judge in Michigan issued a restraining order, forcing Navistar to restart engine production and Ford to resume full payments.

February sales of Ford's Explorer sport utility vehicle fell 26 percent from the year-ago period to 12,971. While still a sharp decline, the Explorer climbed above 10,000 units after falling below that figure in January. Ford makes the vehicle at the Louisville Assembly Plant on Fern Valley Road.

Overall, Ford sales were down 13.5 percent as the automaker continued to slash unprofitable sales to rental-car companies. The decline had been expected because Ford ceased production last year of the Taurus sedan and has cut back on other rental models.

The automaker's cars performed well last month with a 46 percent increase in sales of the Fusion midsized sedan and an 8 percent increase in Focus small cars.

General Motors rebounded last month. Sales at the world's largest automaker climbed 3.4 percent on the strength of large SUVs such as the Cadillac Escalade and Chevrolet Suburban.

Sales of the Chevrolet TrailBlazer, a midsized SUV that competes with the Explorer, fell 21 percent to 10,838.

The Corvette sports car, built in Bowling Green, Ky., had a 9 percent sales drop during the month with 2,784 sold.

Sales of DaimlerChrysler's Chrysler Group fell 8 percent. Successful new vehicles such as the Dodge Caliber and Jeep Compass failed to offset declines in the Chrysler Town & Country minivan and Dodge Ram pickup.

Toyota Motor Co. had a strong February, mostly because of a spike in sales of the Prius gas/electric hybrid car. Prius sales had been falling since October, when Toyota lost half of the federal tax credits available for the vehicle.

Last month Toyota began offering low-interest financing and other incentives, and Prius sales hit a record of 12,227 vehicles, an 87 percent increase.

Sales of the Camry sedan, built in Georgetown, Ky., continued to boom with an 18 percent increase to 32,148. That includes 3,332 Camry hybrids.

The Georgetown-built Avalon sedan continued to struggle with a 19 percent sales decline. Avalon sales have fallen steadily since Toyota launched the redesigned Camry last year.

Sales of all three Toyotas built in Princeton, Ind. fell last month with the Sienna minivan down 11 percent, the Sequoia SUV down 19 percent and the Tundra pickup down 9 percent.

Nissan Motor Co. sales rose 1.2 percent, thanks mainly to strong sales of the redesigned Altima sedan. Its Titan pickup continued to struggle with a 14 percent sales drop.

Honda Motor Co. sales increased 3.2 percent, thanks to a 30 percent increase in sales of the CR-V SUV and a 20 percent jump for the Accord sedan.

Reporter Robert Schoenberger can be reached at (502) 582-4669.

[Jestme13]

I wouldn't be to anxious to get one of those engines Navistar was forced to deliver, would you ?

[DriVer]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Jestme13:
I wouldn't be to anxious to get one of those engines Navistar was forced to deliver, would you ? </div></BLOCKQUOTE>Steve, I'm sure that Navistar will supply engines that will be fine. No need to invite disaster on top of litigation.

[Jestme13]

sure, they supplied bum engines before, now they have a real excuse. Friends don't sue Friends.

[DriVer]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Jestme13:
Friends don't sue Friends. </div></BLOCKQUOTE>And you would know that they're friends because .... ?

We recently saw where Freightliner sued Allison and they were locked up in litigation but the last time I looked at FLCC Press in the latest motorhome magazines they're still running Allison transmissions. So much for ZF but that might be coming down the pike sooner than we think - why beause business is business.

Now I thought all along that FLCC and Allison were the biggest & best of friends! Ya can never tell what Dr. Z has up those diamond cuff linked sleeves of his. I do think he would sell Chrysler in a heart beat before he sold off FLCC. As of the latest prsss when you buy a Freighliner you get a nice Mercedes Diesel - CAT and Cummins have been the biggest friends of FLCC for many years. Not anymore it would seem....

Don't let anyone kid anyone about the engine, it's a Ford Power Stroke and Ford pretty much had all the say so on that motor from day one. They buy motors the same way any of the other manufactures buy components from other vendors. They spec out and buy what they think they want or need. If you look at an equivalent Navistar engine - it's the same but different as it would have to be because it's a MaxxForce 7. WCC (a Navistar Company) will begin using the MaxxForce in the fall of 07 on its UFO. Is it a Power Stroke - not quite but close.

About the Power Stroke - I think there's more to the story than we see in print. Why would it come to this since there most likely wouldn't be a Ford Super Duty truck without a great diesel engine option. Who's bitting the hand or being spiteful - who knows. I do know one thing all those folks that make the engines and trucks have families so I hope this gets resolved quickly.

[Jestme13]

Ya know Mike, there are so many beautiful small displacement diesels in this world, why is FOMOCO arguing with Navistar about another corn binder. Go get a proven ehgine and be done with it. Me, I don't give a hoot.