The Ford Motor Co. reached agreement late Thursday with a key supplier - the Navistar International Corp. - to resume production of diesel engines for its financially rewarding F-Series Super Duty pickup trucks for at least the next 30 days. Both Ford and Navistar will continue to negotiate a contract dispute to settle some issues around it.
Ford said in a statement, "We are pleased there will be no further disruptions to the production of F-Series Super Duty." Last week, Ford won a court order to compel Navistar to resume shipments of diesel engines used by the automaker in the latest variant of the F-Series. The said diesel engine is integrated to the Super-Duty trucks at Ford's Louisville, Kentucky truck plant.
It can be recalled that Navistar stopped shipping engines to the automaker since February 26. The said cessation is anchored on a pricing and warranty dispute. At present, the companies are still in the process of negotiation which is aimed at resolving the underlying issues that have created the dispute.
"This is not a deal deal. The issues are still in dispute," Navistar spokesman Roy Wiley said Thursday. "It's good news for both sides that we can continue to talk in a new spirit of cooperation."
The second generation 2008 Super Duty, which first debuted at the Texas State Fair in the previous year, has a number of unique points that stress the Ford F-Series dominance in the truck market. Two of the distinct features of the truck include the concealed slide-out step and swing-up hand grab bar in the rear tailgate to allow easier access. Nonetheless, one of the crucial auto parts may not be the but its diesel engine. The V8 diesel engine generates 350 horsepower and 650 lb-ft of torque at 2,000 rpm. The variant is also equipped with a five-speed automatic transmission.
The Ford Super Duty is a profitable vehicle. Hence, the disruption in its production and delivery could injure automaker's market share. In December last year, Ford reported a $12.7 billion loss - to disrupt the Super Duty production could make losses even more debilitating. The Ford Super Duty is part of the F-Series lineup. The said lineup accounts for more than a fourth of Ford's sales in the United States. "Ford can't be without Super Duty right now," said Erich Merkle, auto analyst with the consulting firm IRN Inc. in Grand Rapids.
Wiley added, "Under the 30-day consent judgment filed Thursday in Oakland Circuit Court, Navistar will build as many engines as Ford wants and be paid what it is owed per engine under its contract with Ford." Negotiations lasted late into the night Wednesday and much of Thursday to reach the agreement.
Judge John McDonald, who issued the orders requiring Navistar to keep building engines and Ford to keep paying for them, urged both parties to settle their dispute. Both parties are to report back to McDonald in early April. McDonald could continue the consent judgment if both parties agree or set a trial on the automaker's warranty claims.
