Court orders NAVISTAR to produce 6.4
 

I was at my local Ford dealer and am good friends with the parts manager. We started talking about the 6.4 that he ordered. He showed me a message dated March 2, 2007 from Ford that says the court has ordered NAVISTAR to resume producing the 6.4. For what it is worth!

DSMMH

A Court cannot order someone to start building something. This is called specific performance and does not apply to this type of situation. The Court could find that certain damages have occured, but this usually requires a trial with witnesses, evidence, and the like. A trial involving a matter like this could take years. My guess is that your buddy misunderstood what was said. It appears that the Court ordered Navistar to resume shipping engines, which means those engines already built and in inventory need to go to Ford. Once Navistar's inventory is depleted then I would be curious to see what happens next.

Read below.... Production does indeed mean build in this instance.........

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Navistar Says Operating Company Will Resume Production of Diesel Engines for Ford Under Temporary Court Order That Also Requires Ford to Pay For Engines Shipped

Warrenville, Illinois - March 01, 2007
Navistar International Corporation (OTC: NAVZ) said today that it will resume production of Power Stroke® diesel engines used by Ford Motor Company in its heavy duty pickup truck line. The announcement is in response to a temporary order issued by Judge John J. McDonald of the Circuit Court of Oakland County, Michigan.

Judge McDonald issued the temporary order late Wednesday afternoon and scheduled a hearing for both companies Wednesday, March 7.

Under Judge McDonald's order, Ford will be required to pay, without deductions, for all diesel engines it receives from International Truck and Engine Corporation, Navistar's principal operating company.

"We have a great engine that has been met with very positive initial reviews from customers, Ford dealers and media, and we are anxious for it to get out into the marketplace," said Jack Allen, president of International's engine group.

Navistar announced Monday that it was immediately suspending production of the new 6.4L Power Stroke® diesel engine because Ford had stopped honoring the terms of agreement under which the engines were built.

International currently produces Power Stroke® 6.4L diesel engines that meet 2007 emissions standards while increasing performance, durability and fuel economy at its engine plants in Indianapolis, Ind., and Huntsville, Ala.,

Navistar International Corporation (OTC: NAVZ) is the parent company of International Truck and Engine Corporation. The company produces International® brand commercial trucks, mid-range diesel engines and IC brand school buses, Workhorse brand chassis for motor homes and step vans, and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. Navistar is also a provider of truck and diesel engine parts. A wholly owned subsidiary offers financing services. Additional information is available at: www.navistar.com.

That's an interesting order. I noticed it was in State Court. I am curious how the Court got away with this one. Generally, a Court cannot mandate someone to perform in this manner. I wonder if there was a backroom agreement between Ford and Navistar. This would be one way for Navistar to get paid without any reduction in purchase price. If Navistar is getting paid, why not build the engines.

It's not all that different then when a union attemps to strike and they are orderd back to work.

If you also notice, the judge ordered Ford to pay for the engines as well, so they both got whacked. Basically, the judge said that Navistar can't withold engines because they are under contract to deliver those engines and not doing so would be harmful to Ford. At the same time, he told Ford that they are under contract and that not paying for those engines is harmful to Navistar and they must pay.

This was a good move as it keeps the warranty issue between ford and navistar a totally separate issue. That still needs to be worked out but...

Fish