6.4L Powerstroke Diesel - PRODUCTION HALTED

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http://www.detnews.com/apps/pbcs.dll...=2007702260402

Ford Motor Co. said Monday morning that a decision by key supplier Navistar International Corp. will not disrupt production of SuperDuty pickups "in the near term." However, the automaker would not say how long it could keep its truck lines running if the recalcitrant vendor holds out.

Navistar announced Monday that it has halted production of the Power Stroke diesel engine it makes for Ford because of an ongoing contract dispute. The Warrenville, Ill.-based engine manufacturer is the exclusive diesel engine supplier for Ford's heavy duty pickup trucks.

In a statement today, Navistar said it "pays its suppliers and employees under contract terms and that it expects Ford to honor the terms of its agreement."

But Ford said Navistar is the one violating that contract.

"Ford has always honored the agreement and will continue to do so in the future," said Ford spokesman Tom Hoyt. "We have been working very closely with Navistar for many months to resolve these contract issues."

In January, Ford sued Navistar, saying the engine maker was not complying with warranty cost-sharing agreements and that it had unjustifiably raised prices on its products. The suit said at the time that Navistar had threatened to cut off shipment if Ford did not pay the new prices for its engines.

Navistar said it will stop making the 6.4-litre Power Stroke at its Indianapolis and Huntsville, Ala. factories, but added that the Huntsville plant will continue production for other customers.

Any disruption of SuperDuty production would be disastrous for Ford. The struggling automaker just launched a redesigned SuperDuty line, and the big trucks are among the most popular and profitable vehicles it sells.

It is not the first time problems with a supplier have threatened an important new vehicle. Last fall, bankrupt Collins&Aikman Corp. briefly suspended parts shipments to Ford's factory in Hermosillo, Mexico, halting production of the Ford Fusion.