Navistar, Ford Reach New Business Agreement

Warrenville, Illinois

Navistar and Ford reached an agreement last week to restructure our ongoing business relationship and settle all existing litigation between our companies.

“Navistar and Ford benefited from a successful partnership that provided value to both companies for nearly three decades. Therefore, it’s in our best interests to resolve our conflict and continue our relationship with each other in other areas,” said Dan Ustian, chairman, president and CEO. “The next phase of our relationship is consistent with Navistar’s strategy to diversify our customer base, while continuing to provide value to both companies through our existing joint ventures and our supply agreement in South America.”

As a result of the agreement, Navistar and Ford will end our current diesel engine supply agreement, effective Dec. 31, 2009. However, we will continue to collaborate on a range of initiatives, including the existing Blue Diamond Truck and Parts joint ventures.

Navistar will acquire additional equity in the Blue Diamond joint ventures, which will continue to offer dealers and customers F-650 and F-750 medium duty trucks, as well as parts support for a variety of Ford products, including Ford's PowerStroke Diesel-equipped trucks. We will also continue our diesel engine supply relationship with Ford in South America.

Ford will also make a payment to Navistar as a result of the agreement.

“We are pleased to have reached an agreement with Navistar that we believe is in the best interest of both companies,” said Mark Fields, Ford's president of The Americas. “This agreement comprehensively addresses our business relationship with Navistar and will help both companies focus on meeting the needs of our current and future truck customers.”