|Source: Ford Motor Company.|
FORD, NAVISTAR JOIN FORCES TO CREATE BLUE DIAMOND TRUCK COMPANY
DEARBORN, Mi. — August 7, 2001– Ford Motor Company and Navistar International Corporation today finalized plans to form a joint venture to build medium commercial trucks. The joint venture will also furnish truck and diesel engine service parts to Ford and International and explore other advanced diesel engine opportunities.
The joint venture, named Blue Diamond Truck Company LLC, will initially produce Class 6 and 7 medium commercial trucks that will be marketed independently under the Ford Division brand and Navistar’s InternationalÒ brand. The trucks will be produced at Navistar’s plant in Escobedo, Mexico. In subsequent years, Blue Diamond plans to expand the range of commercial trucks for both companies.
Ford and Navistar are both contributing intellectual property to the Blue Diamond joint venture. Additionally, Navistar is contributing a major portion of its Escobedo truck manufacturing facility while Ford is making a cash contribution to the 50-50 joint venture. No financial details are being released.
Jack Allen, newly named general manager of the truck joint venture, said a new common chassis based on International’s recently introduced high performance chassis will be used for commercial trucks (rated 18,000 to 33,000 pounds gross vehicle weight). He emphasized that Ford and International will separately determine their customers’ needs for cabs, interiors, vocational focus, nomenclature and other brand characteristics.
International-branded trucks will exclusively use International I-6 or V-8 engines. Ford-branded trucks will offer International diesel engines as standard and other industry engines as options. International is the worldwide leader in the production of mid-range engines in the 160 to 300 horsepower range.
Prototype production of the Ford truck will begin later this year with full production scheduled for late 2002. International’s new high performance medium truck is already in production. Initially the joint venture will produce Class 6 and 7 medium trucks, but plans call for expanding output to include lighter weight Class 3 to 5 commercial trucks (10,001 pounds to 19,500 pounds). The first such vehicle will be a new specialized commercial truck due in 2003.
“In addition to expanding a strong business relationship between Ford and Navistar, this joint venture will increase the speed of new product development and improve economies of scale in manufacturing and parts procurement,” Allen said.
David W. Tarrant, manager of commercial truck strategy for Ford Motor Company, will serve as the business and strategy director for the Blue Diamond joint venture. He noted, “This partnership creates many new opportunities for both parent companies to compete more effectively in the worldwide commercial truck business. We are looking at a number of exciting ideas which will be developed in the next several years.”
Another element of the joint venture is service parts support, led by Navistar’s Tim Cooney, newly appointed general manager. Cooney indicated that significant opportunities exist to provide high quality product support to customers of the new vehicles, while both companies will pursue other areas of synergy.
Each company will have equal representation on the venture’s eight-person executive board, and neither company will have an equity stake in the other’s parent company.
Dan Ustian, president of International Truck and Engine Corporation’s engine group, will serve as chairman of the executive board. Ford board members will include: Gurminder Bedi, vice president, North American Truck; Mike Jordan, president, Ford Motor Company’s Automotive Consumer Services Group, Gerry Meridith, controller, North American Truck; and Leo Shedden, director, North American Truck Vehicle Programs. Other Navistar board members are Robert Lannert, executive vice president and chief financial officer; Steve Keate, president, International truck group; and Wayne Krzysiak, vice president and general manager, parts operations.
As previously reported, the Ford and Navistar joint venture will explore other possible business opportunities for diesel truck engine products for global markets. No additional details are available at this time.
Ford Motor Company (NYSE: F) is the world’s second largest automaker, with approximately 335,000 employees in 200 markets on six continents. Its automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Credit, Quality Care and Hertz. With world headquarters in Dearborn, Michigan, Ford Motor Company had 2000 calendar year revenues of $170 billion. Additional information can be found on the company’s web site at www.ford.com
Navistar International Corporation (NYSE: NAV) is the parent company of International Truck and Engine Corporation, a leading producer of mid-range diesel engines, medium trucks, school buses, heavy trucks, severe service vehicles, and parts and service sold under the InternationalÒ brand. The company also is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. With world headquarters in Warrenville, Ill. a suburb of Chicago, Navistar had 2000 sales and revenues of $8.5 billion. Additional information can be found on the company’s web site at www.nav-international.com.