Ford sues International over engine dispute

Just spotted this in the news. Look at how much Warranty on the 6.0 is costing Ford!
Dave

Ford sues International over engine dispute
Automaker says new Super Duty pickup won't be delayed

Richard Truett | | Automotive News / January 12, 2007 - 4:22 pm / UPDATED: 1/15/2007 10:42 A.M.

DETROIT -- The new Ford Super Duty pickup is expected to arrive at auto dealerships on time this spring despite a legal fight between Ford Motor Co. and engine maker International Truck and Engine Corp.

The dispute stems from two things:

1. The price International is charging Ford for the Super Duty's new 6.4-liter diesel engine.

2. Warranty costs that Ford claims International owes for the old 6.0-liter diesel that ended production last month. .

According to the Chicago Tribune, Ford's lawsuit says International has threatened to stop shipments of the new engine.

Ford contends that International has raised the price of the new engine and that International refuses to pay its share of warranty costs stemming from repairs to the fuel injection system on the discontinued 6.0-liter V-8. The Tribune reported that Ford claims International refuses to negotiate in good faith.

According to reports, Ford has withheld money from payments to International to recoup funds it thinks it is owed. Ford spokeswoman Kristen Kinley would not say how much is involved, but it could be tens of millions of dollars.

In late 2005, Ford cited warranty costs in a Securities and Exchange Commission filing that shed light on how much it has paid to repair diesel engines supplied by International.

Ford said its warranty costs ballooned by $500 million in the first nine months of 2005 and said much of the outlay was because of problems with International's Powerstroke engine in Super Duty trucks. In 2005, more than 12,000 consumers filed warranty claims related to engine troubles in the Super Duty.

Spokesman Wes Sherwood said today that Ford "has an ample supply of trucks and engines" on hand and will launch the Super Duty on time in the first quarter.

Ford and International have had a rocky relationship since 2000. The companies have sued each other at least twice before. Ford paid International an undisclosed sum in 2003 after Ford canceled a V-6 engine for the F-150 pickup.

An International spokesman declined to comment.

International is a unit of Navistar International Corp. in Warrenville, Ill. Navistar ranks No. 47 on the Automotive News list of the top 100 global suppliers, with original-equipment automotive parts sales of $3.27 billion in 2005.

Ironically, Ford's head of global purchasing, Tony Brown, and Navistar CEO Daniel Ustian are to appear on a panel Wednesday, Jan. 17, at the Automotive News World Congress in Dearborn, Mich. For information, go to autonews.com.

You may e-mail Richard Truett at rtruett@crain.com

Ford had a pretty liberal buyback program for the earliest 6.0 buyers who had problems. This might be part of the overall monetary dispute. It's too bad. All of the diesel pickup manufacturers need to do well for all to succeed in these times of greater emissions control. I suspect both Ford and Navistar will come out of this OK.

Jim