quote:

Navistar Amends Lawsuit with Ford Motor Co.
RV Business
Thursday, May 3, 2007

Navistar International Corp. said it amended its breach-of-contract lawsuit against Ford Motor Co. on Wednesday (May 2), to address the possibility Ford might seek to end a crucial diesel-engine supply pact early.

The Chicago Tribune reported that the amended suit notes recent speculation that Ford might be planning to develop its own diesel engine for use in its pickup trucks, and it stresses that Warrenville, Ill.-based Navistar will seek $2 billion or more in damages if Ford tries to end its current purchase contract before it expires in 2012.

A Ford spokeswoman declined any comment, beyond calling negotiations between the two companies a "private matter" the automaker still hopes will lead to "a fair resolution" of the high-profile dispute.

Rumors that the contract fight might spur Ford to build its own diesel engine have intrigued the auto industry of late, but the prospect seems slim to many observers mainly due to Ford's tenuous financial state.

For years, Navistar has been the sole supplier of the diesel engines Ford uses in its heavy-duty line of pickup trucks. That arrangement has become increasingly contentious of late, however. A new-generation diesel engine designed to meet new clean-air requirements took longer to develop than expected, and costs about $1,500 more than Navistar's old engine models.

The tussle between Navistar and its key customer became public in January, when Ford filed a lawsuit alleging Navistar was charging too much for the new diesel. Ford also disclosed it was withholding payments to Navistar, saying it wanted to recover money the supplier owes it with regard to certain shared warranty costs.

Navistar countersued, claiming Ford had breached terms of the contract under which it buys engines from Navistar. In February, the maker of trucks and diesel engines upped the ante by halting all shipments of the 6.4-liter diesel engines to Ford.

Soon after the cutoff, Ford persuaded a court to order Navistar to resume shipments. And in March, both companies agreed to a court ruling that obliges them to try to resolve the dispute out of court. The court also ordered Ford to resume payments to Navistar, and to hand over half of the $160 million it had been holding back from its supplier.

At a state court hearing Wednesday in Michigan, the judge told both sides to continue talks toward a settlement, but he also set a trial date for June 2008 and said both sides can begin pretrial discovery procedures.

John & Marilyn Yoder
CMSgt (Ret) USAF
Sophia and Misha (Bichons)
2005 Excel Limited 35MKO
2001 Mack CX612 Vision "Semi-Suite"
427hp, 1560 ft.lbs Torque 222"wb
Trail-Air Pinbox


"War is an ugly thing, but not the ugliest of things. The decayed and degraded state of moral and patriotic feeling which thinks that nothing is worth war is much worse. The person who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself."
John Stuart Mill (1806 - 1873)