Navistar suspends diesel engine production; says Ford not honoring terms

Stiffing your suppliers is a dumb thing to do
Navistar suspends diesel engine production; says Ford not honoring terms http://www.detnews.com/apps/pbcs.dll/article?AID=/20070226/UPDATE/702260402
Navistar International Corp. said today that it has halted production of the Power Stroke diesel engine it makes for Ford Motor Co. because of a contract dispute.
Warrenville, Ill.-based Navistar is the exclusive diesel engine supplier for Ford's heavy duty pickup trucks. In a statement today it said it "pays its suppliers and employees under contract terms and that it expects Ford to honor the terms of its agreement."
Ford officials could not immediately be reached for comment.
In January, Ford sued Navistar, saying the engine maker was not complying with warranty cost-sharing agreements and that it had unjustifiably raised prices on its products. The suit said at the time that Navistar had threatened to cut off shipment if Ford did not pay the new prices for its engines.
Navistar said it will stop making the 6.4-litre Power Stroke at its Indianapolis and Huntsville, Ala. factories but that the Huntsville plant will continue production for other customers.
-- "If they pull a knife, you pull a gun. If they put one of yours in the hospital, you put one of theirs in the morgue." Sean Connery, "The Untouchables"
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But letting your supplier stiff you is OK?
Apparently both Ford and Navistar have issues with the deal on the engines. As I am sure you are aware their were a lot of problems with the 6.0L PowerStroke engines. Ford blames Navistar for supplying defective engines. I am sure there is a contract specifying Navistar's warranty obligations. It seems Ford does not think they are being met. Navistar also has a contact with Ford to supply 6.4L engines at a given price. I am sure there are provision in the contract for price renegotiation. Rather than negotiate per the contract, Navistar is trying to unilaterally raise the price. Rather than let the courts sort this out both sides have pushed the launch buttons on the bombers. I am sure Navistar believes Ford can't afford to screw up the launch of the new SuperDuty and therefore they can force Ford to accept their terms. If I was running Ford, I would be tempted to tell Navistar to go to h**l. I doubt if either company can afford to screw up the relationship, so probably within two weeks both sides will recall the bombers, and settle this. Navistar will probably get a price increase, and Ford will probably get the warranty money. Both sides will declare victory and kiss and make up for the public. However, in fact Navistar will be the actual winner. They will merely be paying the warranty cost out of the extorted extra charges for the new engines and after the warranty costs are paid, they will make a lot more money. Ford should start making plans to dump these turkeys.
Ed

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Ford allready dumped these guys for the V6 turbo diesel that was to go into the expedition and F150 trucks. Ford spent about $1e9 and gave up on them.
I dont understand why Ford just didnt go get the Volvo V6 turbodiesel or the VW V6 turbodiesel. Both are sold here in the USA already.
Lynn
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