Ford and its long-time source for its Power Stroke diesel engines, Navistar, will part ways at the end of 2009.
The relationship between Ford and Navistar ended because of Ford’s planned 4.4-liter diesel engine for use in light and medium duty pickups and Ford’s SUVs. Navistar claims that Ford’s development of the engine violates the contract with Navistar.
Navistar claims to have spent millions and millions of dollars on a next-generation diesel engine for Ford’s pickups, vans, and SUVs. Navistar sought hundreds of millions of dollars in damages from Ford. Prior to this dispute both companies had sued each other over warranty claims about the current generation of diesel engines in Ford’s F-Series.
The companies reached a settlement (for an unannounced amount) and announced they would continue to collaborate on several future products including the Blue Diamond Truck joint venture. The Blue Diamond Truck partnership was announced in 2001 and builds medium duty commercial trucks. The venture also supplies engines and parts to dealers. The two companies will also continue their diesel engine supply relationship in South America.
Source: Automotive News