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Navistar, Ford agree to new negotiations in engine dispute

Posted: August 1, 2014

CHICAGO — Feuding business partners Navistar International and Ford Corp. have entered into a consent injunction in which Navistar will continue shipping 6.4L Power Stroke diesel engines to Ford, and the carmaker will pay, without deductions, for each engine.

Navistar’s International Truck & Engine unit suspended production of the engines it builds for Ford F-Series pickups because the carmaker “stopped honoring the terms of agreement under which the engines were built.”

Michigan Judge John J. McDonald recently issued a temporary restraining order requiring Navistar International to restart engine production.

A subsequent hearing was held this week and Judge McDonald asked the two companies to continue discussion to determine whether an agreement can be reached prior to a trial. The new order also requires officers from both companies to meet in an effort to resolve the dispute.

Some industry analysts suspect that Ford will also be made to pay for past deductions.

“Negotiations will continue out of the public forum. We think this is beneficial to both companies, as airing dirty laundry potentially damages both brands,” said a auto market expert at Bear Stearns.

International Truck and Engine has been the exclusive diesel engine supplier for Ford’s pickup trucks since 1979 and last month launched a new 6.4L Power Stroke for Ford’s new Super Duty.

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