FarmerMatt
NAXJA Forum User
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- Down on the Farm
Could be a reality. Fords on the ropes & one of there flagships looks to be in trouble.
http://www.mlive.com/newsflash/michigan/index.ssf?/base/business-10/1168643961254260.xml&storylist=newsmichigan
Ford sues supplier Navistar over engine prices, warranty dispute
1/12/2007, 6:11 p.m. ET By JOHN D. STOLL
The Associated Press DETROIT (AP) — Ford Motor Co. has filed suit against U.S. diesel engine supplier Navistar International Corp. regarding pricing and a contract dispute, a move that could trigger hiccups for the supply of high-profit Super Duty pickup trucks down the road.
Dearborn-based Ford filed the lawsuit in a Michigan court against Warrenville, Ill.-based Navistar on Thursday, accusing it of not complying with a warranty cost-sharing agreement and "unjustifiably" raising prices on a diesel engine used in the F-series pickup truck line.
The lawsuit states that Navistar has threatened to cut off shipments if Ford does not pay a price Navistar is demanding, a move Ford says would breach a contract. Also, Ford accuses Navistar of not complying with warranty-contract obligations related to the cost of fixing quality glitches that consumers encounter.
Ford started debiting Navistar's invoices to recover what it feels the supplier owes related to warranties, according to the lawsuit.
The lawsuit comes at a vulnerable point for Ford and Navistar, which are counting on a successful partnership to make money in a tough U.S. market where high costs and falling domestic-vehicle market share have forced job cuts at both companies.
Though Ford's actions could hurt the auto maker and the supplier, Ford is banking on the success of large pickups — many of which use Navistar engines — to help the auto maker regain profitability. Because engines are such high-cost components, it is seen as essential for Ford to pay competitive prices for the part.
Both Ford and Navistar confirmed the lawsuit, which was reported Friday by the Chicago Tribune, though Navistar spokesman Roy Wiley said the company had not yet been officially served.
"This is totally without merit and we are going to vigorously respond in court," Wiley said.
Ford is in the midst of launching its critical F-Series Super Duty vehicles in the United States. The truck has traditionally represented more than 300,000 vehicles worth of annual volume, and 70 percent of Super Duty trucks carry diesel engines. The vehicle was redesigned for 2007, but its sales launch was delayed by nearly six months due to problems in diesel engine development — the launch is now planned early this year.
Ford and Navistar have a longtime partnership for the development and supply of diesel engines, but various quality issues and a delay on the development of a recent product have shaken the relationship somewhat.
http://www.mlive.com/newsflash/michigan/index.ssf?/base/business-10/1168643961254260.xml&storylist=newsmichigan
Ford sues supplier Navistar over engine prices, warranty dispute
1/12/2007, 6:11 p.m. ET By JOHN D. STOLL
The Associated Press DETROIT (AP) — Ford Motor Co. has filed suit against U.S. diesel engine supplier Navistar International Corp. regarding pricing and a contract dispute, a move that could trigger hiccups for the supply of high-profit Super Duty pickup trucks down the road.
Dearborn-based Ford filed the lawsuit in a Michigan court against Warrenville, Ill.-based Navistar on Thursday, accusing it of not complying with a warranty cost-sharing agreement and "unjustifiably" raising prices on a diesel engine used in the F-series pickup truck line.
The lawsuit states that Navistar has threatened to cut off shipments if Ford does not pay a price Navistar is demanding, a move Ford says would breach a contract. Also, Ford accuses Navistar of not complying with warranty-contract obligations related to the cost of fixing quality glitches that consumers encounter.
Ford started debiting Navistar's invoices to recover what it feels the supplier owes related to warranties, according to the lawsuit.
The lawsuit comes at a vulnerable point for Ford and Navistar, which are counting on a successful partnership to make money in a tough U.S. market where high costs and falling domestic-vehicle market share have forced job cuts at both companies.
Though Ford's actions could hurt the auto maker and the supplier, Ford is banking on the success of large pickups — many of which use Navistar engines — to help the auto maker regain profitability. Because engines are such high-cost components, it is seen as essential for Ford to pay competitive prices for the part.
Both Ford and Navistar confirmed the lawsuit, which was reported Friday by the Chicago Tribune, though Navistar spokesman Roy Wiley said the company had not yet been officially served.
"This is totally without merit and we are going to vigorously respond in court," Wiley said.
Ford is in the midst of launching its critical F-Series Super Duty vehicles in the United States. The truck has traditionally represented more than 300,000 vehicles worth of annual volume, and 70 percent of Super Duty trucks carry diesel engines. The vehicle was redesigned for 2007, but its sales launch was delayed by nearly six months due to problems in diesel engine development — the launch is now planned early this year.
Ford and Navistar have a longtime partnership for the development and supply of diesel engines, but various quality issues and a delay on the development of a recent product have shaken the relationship somewhat.