The Navistar International Corporation earlier announced that it is suspending the production of the Power Stroke(R) diesel engine that it builds for the Ford Motor Company. The suspension of this production is the alleged dishonoring of the terms of agreement under which the engines were manufactured.
Navistar has been the exclusive diesel engine supplier for the automaker's heavy duty pickup trucks since the year 1979. Earlier, the company built a new 6.4L Power Stroke(R) diesel engine that complies with this year's emissions standards. Aside from complying with the 2007 emissions standards, the new diesel engine is engineered to increase performance, durability and fuel economy.
Navistar said in a statement that it pays its suppliers and employees under contract terms and that it expects Ford to honor the terms of its agreement the same way. The Warrenville, Ill.-based engine manufacturer is the exclusive diesel engine supplier for Ford's heavy duty pickup trucks. With the said contract dispute, critics in the industry predict that the production of some of Ford's bread-and-butter trucks would be greatly affected.
Any interruption of the Ford SuperDuty production would be ruinous for the automaker. Ford is still under pressure and the recuperation period could take longer than expected. It can be recalled that Ford just launched a redesigned SuperDuty line, and the big trucks are among the most popular and profitable vehicles in its lineup. Any disruption could mean a more enduring loss. It is not as undemanding as manufacture disruption - the controversy includes its pride vehicles, no less.
Ford, on the other hand, said that Navistar is the one violating the contract. Moreover, the automaker added that a decision by key supplier Navistar International Corp. will not disrupt production of the Ford SuperDuty pickups "in the near term." The automaker would not say how long it could keep its truck lines running if the recalcitrant vendor holds out.
"Ford has always honored the agreement and will continue to do so in the future," said Ford spokesman Tom Hoyt. "We have been working very closely with Navistar for many months to resolve these contract issues."
Ford has enjoyed leadership in the manufacture of pickup trucks. The said excellence has been etched in the Ford brand for more than a couple of decades. Navistar believes the new Power Stroke 6.4L diesel engines it supplies Ford provided the latter the opportunity to maintain or improve its standing in the truck manufacture and industry.
In January, Ford sued Navistar alleging that the latter was not complying with warranty cost-sharing agreements and that it had unjustifiably increased prices on its diesel engines. The suit also stated that the engine manufacturer had threatened to cut off shipment if Ford did not pay the new prices for its engines.
The diesel engine manufacturer also announced that it will stop producing the .4-litre Power Stroke at its Indianapolis and Huntsville, Ala. Factories. Nevertheless, Navistar added that the Huntsville plant will continue production of the mentioned product for other customers.
This is not the first time that Ford is pestered by supplier problems that eventually threatened important vehicles. It can be recalled that bankrupt Collins & Aikman Corp. suspended the shipments of some auto parts to Ford factory in Hermosillo, Mexico. The said circumstance created a halt in the production of the Ford Fusion.
