Navistar close to settling Ford dispute

Navistar International Corp. said it is close to settling a dispute with Ford Motor Co. over Ford's decision to discontinue a V-6 diesel engine program that Navistar had agreed to supply. Navistar is seeking reimbursement from Ford to recover investment and development costs for the engine. Navistar had built an engine assembly plant in Huntsville, AL, and developed a V6 diesel engine, which it could sell only to Ford. Navistar spokesman Roy Wiley said an agreement with Ford was expected before the end of Navistar's fiscal second quarter, which ends April 30. "We are in discussions. We hope to have a successful conclusion soon," Navistar spokesman Wiley told Reuters. Ford notified the company last October of its decision to postpone plans for the new engine after determining the business was no longer viable. The engine maker took a pretax charge of $170 million because of the cancellation of the 1998 agreement. Navistar was to provide Ford with V6 diesel engines for its F-150 pickup truck, Econoline 150 vans, Ford Expeditions and Lincoln Navigators from model years 2002 through 2012. Navistar already supplies Ford with V-8 diesel engines for its F-Series Super Duty pickups under an exclusive contract that runs through 2012. Navistar also produces medium-duty trucks for Ford in Mexico under a joint venture called Blue Diamond.

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