Navistar Sues Ford

Keith Browning · June 7, 2007

Navistar sues Ford for breach of contract

Company says it is seeking 'hundreds of millions of dollars' after Ford planned to produce new diesel engine.

June 6 2007: 6:12 PM EDT

DETROIT (Reuters) -- Navistar International Corp. said Wednesday it filed a lawsuit against Ford Motor Co. for breaching a diesel engine contract covering F-150 pickup trucks, marking an escalation of a legal battle between the two.

The Illinois-based truck and engine maker said the suit, filed in Cook County, Illinois, seeks "at least hundreds of millions of dollars" in damages.

Navistar (Charts), the exclusive supplier of diesel engines to Ford's Super Duty pickups since 1979, said Ford plans to develop a new diesel engine designed by International Truck and Engine Corp., Navistar's principal operating company.

According to the lawsuit, Ford is planning to make a 4.4-liter diesel engine for the F-150 by late 2009 or 2010, and that would violate the automaker's contract with Navistar.

The lawsuit says International spent millions of dollars to develop a next-generation diesel engine for vehicles, including the F-150 pickups, for which Ford previously had not offered diesel engines.

Navistar said Ford had agreed International would make the new engines for Ford in North America.

Ford (Charts, Fortune 500) was not immediately available for comment.

The lawsuit is the latest twist in a contract dispute that began in January, when Ford sued Navistar over warranty costs and engine prices related to the contract for the F-Series, the most popular vehicles in their class.

That prompted Navistar briefly to cut off diesel engine shipments to Ford, although a judge later ordered the company to resume shipments while the case proceeds.

Navistar also said the lawsuit, filed June 4, is separate from previous litigation.

The two in March agreed to try to resolve the contract dispute and also agreed to a court order that required Navistar to continue to ship the engines and Ford to keep paying for the engines without deductions.

Navistar's brief halt of diesel engine shipments threatened to disrupt production of the Super Duty, one of Ford's most profitable vehicles and a key launch this year as Ford tries to recover after losing more than $12 billion in 2006.

Keith Browning · June 7, 2007

More fuel to the fire, by the way I am following a thread on TDC figured I would post this in case you miss it...

Quote:

From Automotive World:

Automotive Powertrain: Feature

More than one million new V8 diesels planned for 2010

By John Mortimer

29 May, 2007

Source: Automotive World

Production capacity of over one million V8 diesel engines a year is being planned in North America. Production of the first units is expected to begin in June 2008.

All three major US-based OEMs, Chrysler (through the use of diesels from Cummins Inc.), Ford and General Motors have revealed plans for new generation V8 diesel engines, but to these must be added the V8 diesel engine line at International Truck & Engine Corporation's Huntsville, Alabama plant which will also receive a revamp. Full capacity could be reached in 2010.

All of these new V8 diesel engines will use compacted graphite iron (CGI) for the cylinder block material.

Roger Cope, vice chairman of MAG Industrial Automation Systems and president of MAG International of New York, said his company supported CGI simultaneous engineering projects for US OEMs during 2006 and as a result has received major orders for machine tool equipment.

Cope told shareholders at a recent annual general meeting of SinterCast, the company that produces CGI foundry process control technology, that MAG had won four major orders covering seven cylinder block machining lines from North American OEMs. Cole added that the phasing in of production from late 2008 would be "fast to full production - a curve like a hockey stick". "The old slow ramp-up curves of four years from SOP (start of production) to mature production as at Audi and Ford (UK) are history," he added.

It is known that Ford is a long-time user of MAG machine tools and Ford's Chihuahua, Mexico plant will be the recipient of over 100 machining centres from MAG to make both the new 4.4-litre and 6.7-litre V8 diesel engines. The first 4.4-litre V8 engine will come off one line in 2008; the first 6.7-litre some six months later on another line. There will be two separate machining lines. Ford will receive its CGI cylinder blocks from Tupy SA in Joinville, Brazil.

Cummins Inc. will also use MAG machining centres for its new engine programme due in the 2009/2010 time scale.

International Truck and Engine Corporation already uses MAG transfer lines for engines sourced from Huntsville. MAG is expected to modify this line to meet International's new engine requirements. At least one North American transplant could be a candidate for this engine, most likely Japanese.

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some observers, like Roger Cope of MAG, have pointed to a possible eventual vee-diesel engine growth to four or five million diesel units a year

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GM has revealed plans to use CGI in its new vee-diesels with GM Powertrain's Tonawanda plant in Buffalo, NY, cited as the location for engine production that will start October 2009. The plant will get a US$300m investment to make the 4.5-litre V8 diesel. Plant refurbishment begins this year.

John Buttermore, GM Powertrain vice president of global manufacturing, said: "Its power and smoothness will be among the world's best, and yet more fuel efficient and environmentally friendly."

According to Professor Fritz Indra, a former executive director of advanced engineering at GM Powertrain and a SinterCast board member, GM will source its V8 cylinder blocks in CGI from Tupy SA in Brazil. Besides its own North American-built V8 diesel engines, GM will source V6 diesel engines from VM Motori in Cento, Italy. This engine also will use a CGI cylinder block from Tupy SA.

Significantly, Tupy SA appears to be the common denominator in all these engine programmes.

However, of the four North American OEMs, only Ford has extensive volume production experience of machining CGI, which is known to present engine builders with new challenges in meeting quality and cycle times. Cummins, GM and International are all newcomers to the material in volume production terms, and will be operating in uncharted waters, despite extensive experimental test work. It is one matter to carry out unhurried lab-based machining trials, it is quite another to deliver consistent high-quality blocks in production volumes, day in day out, at acceptable unit cost levels. So these three firms are crossing thresholds that will present new challenges, quite apart from the challenges of bringing new engine programmes on stream, and on time.

Ford's production lines in Chihuahua are expected to add 400,000 units a year of new V8 diesel engine capacity; Cummins is expected to add another 200,000 V8 units. The capacity of International's Huntsville V8 line is likely to be another 200,000 units, making 800,000 units in all.

No indication has been given by GM of its planned new V8 diesel engine capacity, but it could be in the region of 350,000 units a year.

Put together these numbers give a total output of 1,150,000 units.

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No indication has been given by GM of its planned new V8 diesel engine capacity, but it could be in the region of 350,000 units a year

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However, some observers, like Roger Cope of MAG, have pointed to a possible eventual vee-diesel engine growth to four or five million diesel units a year. According to Cope, the diesel engine will dominate in the US pickup and SUV sectors, and he predicted that the majority of the new vee-diesels would rely on CGI cylinder blocks.

Chrysler, Ford and GM have all seen their passenger car markets in North America eroded thanks to competition from Asia. All three are anxious not to see their profitable pickup truck and SUV markets devastated too. This explains their anxiety to move fast into diesels in these sectors before the Japanese and Koreans get moving.

Diesels also will penetrate the North American passenger car market. Nissan will introduce a V6 diesel in North America and Hyundai already has a new V6 diesel, based on a CGI block. Both Audi and Ford have V6 and V8 diesels in Europe with CGI blocks. But other OEMs will step up their action, including Mercedes-Benz and Volkswagen. It remains to be seen to what extent CGI can penetrate this sector of the diesel market as well.

Dr Steve Dawson, president and chief executive officer of SinterCast, stated recently that the company's near-term market consists of vee-diesel engines for passenger vehicles, and engine components (blocks and heads) for commercial vehicles. "Within the vee-diesel section, each of the seven publicly announced vee-diesel engines were based on a CGI block," said Dawson. "The trend towards CGI in the vee-sector is expected to continue. SinterCast is currently involved in vee-diesel development and pre-production programmes that provide volumes of at least two million engine equivalents."

He added that in total, global production in the vee-diesel and commercial vehicle (I6) sectors is expected to increase from ten million engine equivalents in 2006 to 18 million in 2012. Dawson also stated that growth is favoured by increased commercial vehicle sales in Asia and the introduction of mid-range (4- to 7-litre) CGI vee-diesels in North America.

Dawson is expected to make announcements in 2007 that will add another one million CGI engine blocks in the market. The most recent announcement revealed Volvo as the latest player to endorse the technology for commercial vehicle engines. SinterCast earns around €50/tonne of as-cast CGI delivered from the foundry.

Both India and China are expected, in that order, to embrace CGI also. In India, Mahindra & Mahindra as well as Tata are strong candidates.

Source : http://www.automotiveworld.com/APA/content.asp?contentid=60929

Keith Browning · June 7, 2007

More...

This is apparently an older article

Quote:

Ford mulls new 4.4-litre diesel for F-Series trucks

by John Mortimer

Ford’s engineers are mulling a new 4.4-litre V8 diesel engine as a power unit for the company’s F-Series pick-up trucks, and have solicited tooling so far. This engine is substantially different than the new V8 planned for upcoming Land Rovers that will replace the existing BMW-sourced engines.

Insider ripples appear in the wake of news that the company has triggered record sales of the F-Series trucks. Ford sold 126,905 trucks in July 2005, well above the previous record of 102,424 units set in October 2001. Word is that the cylinder block will share the compacted graphite iron (CGI) construction of the United Kingdom-produced Lion V6 engine to achieve class-leading power density.

The potential arrival of a new V8 diesel engine is significant for at least two reasons, according to insiders. First, the new diesel engine will allow the company to become independent of Navistar International that supplies diesels for the F-Series. Navistar is based in Indianapolis and Hunstville.

Second, Ford does yet offer a diesel engine in the popular F150 model, the smallest of the F-Series trucks. Power ranges from 202 hp (352 Nm torque) from the 4.2-liter V6, through 231 hp (396 Nm torque) for the 4.6-liter V8, to 300 hp (494 Nm torque) from the 5.4-litre Triton engine. These are all gasoline engines. A diesel is seen as essential for future sales leadership.

For the F250 and F350 models, Ford can offer only the 6.0-liter Powerstroke diesel engine which produces 325 hp and 770 Nm torque – the other two offerings, the 5.4-litre Triton of 300 hp and the 6.8-litre V10 Triton of 355 hp (615 Nm), are both gasoline engines.

The Powerstroke diesel is manufactured by Navistar International, which has also developed a new V6 diesel engine – the VT275. This is a 4.5-liter V6 turbodiesel. However, it develops only 200 hp – Ford develops this power rating from its smaller, lighter and more compact V6 Lion diesel engine manufactured in the United Kingdom at Dagenham.

This horsepower gap highlights the huge gap that exists in diesel technology in Europe and North America . Navistar had a 4.0-litre V6 diesel, but Ford can easily match it on price and performance. Added to which, Ford and Navistar have had their differences in the past regarding the supply of both V6 and V8 diesel engines. Navistar had planned to ship 4.0-litre V6 diesels to Ford some years back, but the deal unraveled, reputedly on grounds of fuel injection technology.

The significance of Ford’s new diesel engine is its power rating. At 4.4-liters with a turbocharger, the engine will develop 330 hp – ideal for all F-Series passenger and light-duty applications, namely, F150, F250 and F350. Also, it should be capable of at least 700 Nm of torque. This will bring it within nudging distance of Navistar’s 6.0-liter Powerstroke, but in lighter and more compact form.

The arrival of the engine will be good news for Britain . As product planners mull over the options there is a good chance the engine will be built at Ford’s Dagenham Diesel Centre, Essex , UK , where it will be manufactured alongside the existing V6 Lion diesel engine.

However, in order to achieve a power output of 330 hp, Ford’s powertrain engineers will need to use compacted graphite iron (CGI) for the cylinder block, just as they have done for the cylinder block of the V6 diesel engine that is used by Jaguar, Land Rover and the PSA group in France.

Ford’s preferred supplier of CGI cylinder blocks is Tupy SA in Brazil . Tupy heads the four-fold supply chain of foundries specializing in CGI – Tupy also supplies Audi in Germany .

The logistics of the new engine would require the blocks to be cast by Tupy in Brazil , given cubing machining operations at the foundry and then shipped to Dagenham for finish machining and final assembly. The completed engines would then be shipped across the Atlantic for fitment to the F-Series.

Insiders in the UK believe the new 4.4-litre engine would make an ideal power unit for Land Rover’s top class Range Rover models. The current top-of-the-range model uses a 305 hp 4.4-litre V8 gasoline engine built at Bridgend in South Wales .

Speculation in the UK has it that Ford is aiming at a production volume for the new engine of around 130,000 units, of which 100,000 would go the US for F-Series and 30,000 to Land Rover.

Land Rover uses a 4.4-litre gasoline engine in the latest version of the Discovery SUV, the LR3, as well as a 4.0-liter gasoline engine for selected markets. There is also the TDV6 turbodiesel available – but so far only for manual six-speed gearbox versions. So there is potential too for the new 4.4-litre engine to fit into this vehicle.

The new 4.4-litre engine is estimated to be about three years away from production. But with the current roar away sales of F-Series, Ford is likely to miss potential diesel sales. Experience with Ford’s V6 Lion diesel has proved the engine can offer almost gasoline-like performance coupled with huge torque characteristics, although the current trend in North America is for a burbling V8.