Navistar blames charge on aborted Ford order


By Richard Truett
Automotive News / October 29, 2002

Ford Motor Co.'s about-face on plans to offer a V-6 diesel engine in several light-duty truck models for the 2002 model year accounts for nearly half of the $456 million restructuring charge announced Tuesday by Navistar International Corp.

Navistar said it signed a contract with Ford in 2000 that called for the Warrenville, Ill., diesel engine and truckmaker to start delivering 4.5-liter V-6 diesel engines for use in 2002 model F-150 pickups, Econoline van, Expedition and Lincoln Navigator sport-utilities.

Navistar built a factory in Huntsville, Ala., to build the V-6 engines.

Ford will not say why the V-6 diesel program has been delayed or canceled. But the program accounts for $210 million of Navistar's $456 million charge, to be taken in the company's fourth quarter.

In a statement, Navistar said: "Ford has advised the company that their current business case for these vehicles is not viable."

Ford spokeswoman Jennifer Flake declined to say why the V-6 diesel program is not viable.

There are several potential reasons:



Emissions: Though Navistar claims to have emissions technology that allows use of diesels in vehicles under 8,500 pounds gross vehicle weight rating, no other automaker or engine manufacturer has made a similar claim. General Motors, which is testing a V-6 version of the Duramax diesel, doesn't think it can make the engine meet existing and upcoming emission standards until low-sulfur diesel fuel becomes available in late 2006.


Performance: Navistar's V-6 has a displacement of 4.5 liters. It may not deliver enough performance at certain speeds to satisfy sport-utility and truck buyers who crave high-horsepower engines.


Cost: The engine may be too expensive to produce and sell at a profit. The V-8 diesel versions of the Ford, GM and Dodge full-sized pickups add between $2,500 and $3,000 over the cost of a gasoline engine.


Appeal: Automakers are nervous about the potential of diesel engines. A recent study by the Chrysler group found that just 6 percent of buyers would consider a vehicle with a clean diesel engine - lower than those who would buy a vehicle with a navigation system. Automakers fear that buyers won't embrace diesels because of the bad image from the 1970s.

__________________
1999 F-150 AirRaid, 4.10 gears, tint, superchip, see my gallery for more.