Ford Faqs

The head of Navistar’s Eastside diesel complex is worried that its 1,600 employee plant is going to lose its contract with Ford. If they can’t keep the contract with Ford than they will be forced to shutdown the 70 year old factory.

“The real key is: How do we keep the Ford business? If we don’t have it, there’s no plant there,” said Dan Ustian, Navistar chairman, in a conference call with reporters and industry analysts. “We’re going to do everything possible to keep that business.”

The Eastside engine plant has only one customer, Ford, and is Ford’s only supplier of diesels for F-series pickup trucks. Looming larger than the strike is a price dispute. Ford and Navistar squared off in court last year over the appropriate price for the diesels being made at the Indianapolis plant. The matter is still unresolved.

Until the dispute came up, Navistar seemed to have a secure future compared with the city’s other big automotive plants. Navistar in Indianapolis rode through the downsizing of the Detroit auto industry relatively untouched. A Ford supplier since 1982, the diesel plant benefitted from the nation’s truck craze and steadily shipped diesels to Ford’s Kentucky F-series pickup truck line.

Now Ford, Navistar’s biggest customer, is struggling to stay out of bankruptcy. It relies on sales of high-profit pickups powered by the Indianapolis diesels, which it markets as Power Strokes. In recent months, Navistar landed a $1.6 billion federal order for MRAPs, military vehicles assembled in Illinois. And only 2,400 of its U.S. production workers are in the UAW, compared with 6,600 in 2000, the company reported.

Because of the price dispute, industry analysts say Ford has explored replacing the Navistar 6.4-liter model with a Ford diesel. Keeping the Ford business, Ustian said, could depend on clearing up the price dispute with Ford while maintaining diesel quality and on-time delivery, and reducing costs in Indianapolis by improving production efficiencies. He lauded the Indianapolis work force.