Navistar, Ford Agree to Settle Engine Dispute

Supply of 6.4-liter diesel Power Stroke engines resumes

March 12, 2007 — Navistar International Corp. has resumed shipping 6.4-liter Power Stroke diesel engines to Ford Motor Co., following a court order, and the two companies have entered into a consent injunction to try to resolve the dispute that led the engine builder to cut-off the supply in February. Ford, for its part, agreed to pay for each engine without deductions.

Navistar's operating subsidiary, International Truck and Engine Corp. manufactures the Power Stroke engines, which Ford installs in its F-Series Super Duty pick-ups.

In January, Ford sued Navistar over warranty costs and engine prices. On February 26, Navistar suspended production of the engines, explaining Ford had stopped honoring the terms of the original supply contract. Ford obtained a temporary restraining order, which led to the current circumstance.

Reportedly, Ford faced disruptions to the production of its Super Duty pickp-ups, which are among most popular models.

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