theoldwizard Posted May 3, 2007 Share Posted May 3, 2007 From Navistar Press Release Navistar Files Counter-Complaint against Ford That Asks for Damages WARRENVILLE, Ill.--(BUSINESS WIRE)--Navistar International Corporation (Other OTC: NAVZ) announced today that it has filed a counter-complaint against Ford Motor Company for breach of contract and is seeking damages. Navistar filed its counter-complaint following a hearing before Judge John J. McDonald of the Circuit Court of Oakland County, Michigan. The hearing related to a lawsuit filed by Ford against Navistar involving 2007 engine pricing and prior period warranty claims. Navistar counter-sued, stating that pricing is consistent with contractual agreements, that the warranty claims are entirely without merit and that Ford has stopped honoring the terms of an agreement under which engines were built. Navistar amended its counter-complaint in today’s filing. Two previous hearings have been held and Judge McDonald has asked the two companies to meet privately to see if a settlement to the dispute could be reached prior to a trial. At today’s hearing, Judge McDonald set a schedule for discovery and other events in the case. Navistar’s principal operating company, International Truck and Engine Corporation, has been the exclusive diesel engine supplier for Ford’s heavy-duty pickup trucks since 1979 and recently launched a new 6.4L Power Stroke® diesel engine that meets 2007 emissions standards while increasing performance, durability and fuel economy. Ford, using International-manufactured Power Stroke® diesel engines, has enjoyed leadership market share of close to 50 percent for many years. Navistar believes the new Power Stroke 6.4L diesel engines provide Ford the opportunity to maintain or improve this leadership position. The amended counter-complaint filed today states that Ford’s breach is based on indications that Ford plans to develop its own diesel engine for introduction prior to 2012. Ford’s failure to honor the contract, which runs through 2012, entitles Navistar to damages that have been preliminarily calculated to more than $2 billion, the complaint states. In addition, Navistar states that Ford’s actions are interfering with supply-base agreements. Navistar International Corporation (Other OTC: NAVZ) is the parent company of International Truck and Engine Corporation. The company produces International® brand commercial trucks, mid-range diesel engines and IC brand school buses, Workhorse brand chassis for motor homes and step vans, and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. Navistar is also a provider of truck and diesel engine parts. A wholly owned subsidiary offers financing services. Additional information is available at: www.navistar.com. Quote Link to comment Share on other sites More sharing options...
Ovaltine Posted May 3, 2007 Share Posted May 3, 2007 Navistar slaps Ford with $2 billion lawsuit http://www.autoblog.com/2007/05/02/navista...illion-lawsuit/ Ford has not been having much luck with the 6.4-liter diesel engines for its Super Duty trucks of late. In the latest twist of a saga that began in January, Navistar, the company that makes those engines, had added additional charges to its $2 billion counter-suit against Ford. Navistar has been the exclusive maker of Ford's Super Duty diesel truck engines since 1979. In January of this year, Ford sued Navistar over the price of the engine and excessive warranty claims. In February, Navistar halted shipments of the just launched 6.4-liter engines, saying Ford had stopped paying for them. Ford got a court order to compel Navistar to ship the engines (which Ford paid for) -- then Ford had to recall more than 8,000 trucks because customers were reporting tailpipe fires. Navistar has now filed a counterclaim that seeks more than $2 billion in damages, and alleges that Ford is planning to develop its own diesel engines prior to 2012. There is no indication as to which party, Ford or Navistar, has a better case. For now, though, while the engine issues can't be good for Navistar, it is far more damaging for Ford to have to deal with these kinds of problems with its newly-launched bread-and-butter vehicle. Quote Link to comment Share on other sites More sharing options...
swenson88 Posted May 3, 2007 Share Posted May 3, 2007 I hope Ford and Navistar can straighten this mess out, the SuperDuty is a key product and the PowerStroke makes up the bulk of SuperDuty sales. Not good, and it'll be years before Ford can bring out their own diesel. Quote Link to comment Share on other sites More sharing options...
BORG Posted May 3, 2007 Share Posted May 3, 2007 Ford has got to get its act together on its Diesel problems. This is not a supplier problem, this is a Ford problem. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted May 3, 2007 Share Posted May 3, 2007 this is a Ford problem. Duh, would that be why Ford is suing Navistar? I was confused for a while there, about how Ford was involved in this at all. So, are you telling me that the assorted problems Ford has had with Navistar diesels reflect poorly on Ford's products? Hmm. I don't think I would've ever reached that conclusion myself. Thanks. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted May 3, 2007 Share Posted May 3, 2007 (edited) I think, dear Borg, what I'm trying to get at in all that sarcasm above, is that we all KNOW that this reflects poorly on Ford, and that Ford OBVIOUSLY needs to deal with this, and that Ford's involvement in this issue is pretty much a given. I don't think anyone here is deluding himself over the impact these issues have on perception of Ford's diesel powered trucks. BTW, I think you may be overstating the case somewhat on the severity of the 6.4 issues. The declining housing market has furnished a far better excuse for postponing purchase than concerns over 6.4L reliability. Edited May 3, 2007 by RichardJensen Quote Link to comment Share on other sites More sharing options...
01FOCI Posted May 3, 2007 Share Posted May 3, 2007 "while increasing performance, durability and fuel economy." I've read to date, fuel economy has been worse than the 6.0, so thats a breech of contract... Quote Link to comment Share on other sites More sharing options...
theoldwizard Posted May 3, 2007 Author Share Posted May 3, 2007 Um, how can Navistar be awarded damages for breach of contract, when it hasn't been breached yet? Something I have always wondered about also ! My understanding is that the contract has a guaranteed volume clause. Quote Link to comment Share on other sites More sharing options...
theoldwizard Posted May 3, 2007 Author Share Posted May 3, 2007 ... I've read to date, fuel economy has been worse than the 6.0, so thats a breech of contract... True ! The engineers blame the additional emission controls, especially the particulate trap regen cycle. Quote Link to comment Share on other sites More sharing options...
MGallun Posted May 3, 2007 Share Posted May 3, 2007 i know the 6.0 had its issues, and now the 6.4 with the flame thrower option, but has the previous deisels made by navistar had issues? or is navistars quality dropping lately? Quote Link to comment Share on other sites More sharing options...
LincolnFan Posted May 3, 2007 Share Posted May 3, 2007 The 7.3 was pretty good, and it went downhill since then. 6.0 & 6.4 are both POSes it seems. Quote Link to comment Share on other sites More sharing options...
silvrsvt Posted May 3, 2007 Share Posted May 3, 2007 i know the 6.0 had its issues, and now the 6.4 with the flame thrower option, but has the previous deisels made by navistar had issues? or is navistars quality dropping lately? 6.0 & 6.4 are both POSes it seems. There was a cracked turbo shaft (was not properly started at -20 degree temps if Ford is to be believed) that cause that flame thrower option, not mention that truck was running really weird for a diesel engine. Quote Link to comment Share on other sites More sharing options...
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