Navistar, Ford Finalize Joint Venture Plans for Medium Trucks

Ford Motor Company, Dearborn MI, and Navistar International Corporation announced August 7 that the companies have finalized plans to form a joint venture to build medium commercial trucks, according to Ford information.. The joint venture, named Blue Diamond Truck Company LLC, will initially produce Class 6 and 7 medium commercial trucks that will be marketed independently under the Ford brand and Navistar's International brand. The trucks will be produced at Navistar's plant in Escobedo, Mexico.

The joint venture will also furnish truck and diesel engine service parts to Ford and International and explore other advanced diesel engine opportunities. In subsequent years, Blue Diamond plans to expand the range of commercial trucks for both companies.

Ford and Navistar are both contributing intellectual property to the Blue Diamond joint venture. Additionally, Navistar is contributing a major portion of its Escobedo truck manufacturing facility while Ford is making a cash contribution to the 50-50 joint venture. No financial details are being released.

Jack Allen, newly named general manager of the truck joint venture, said a new common chassis based on International's recently introduced high performance chassis will be used for commercial trucks (rated 18,000 to 33,000 pounds gross vehicle weight). He emphasized that the cabs, interiors, vocational focus, nomenclature and other brand characteristics will be maintained distinctly Ford or International. International-branded trucks will exclusively use International I-6 or V-8 engines.

Ford-branded trucks will offer International diesel engines as standard and other industry engines as options. International is a leader in the production of mid-range engines in the 160 to 300 horsepower range. Prototype production of the Ford truck will begin later this year with full production scheduled for late 2002. International's new high performance medium truck is already in production. Initially the joint venture will produce Class 6 and 7 medium trucks, but plans call for expanding output to include lighter weight Class 3 to 5 commercial trucks (10,001 pounds to 19,500 pounds). The first such vehicle will be a new specialized commercial truck due in 2003.

For competitive reasons, no other details will be revealed until products are market ready, Allen said.

"In addition to expanding a strong business relationship between Ford and Navistar, this joint venture will increase the speed of new product development and improve economies of scale in manufacturing and parts procurement," Allen said.

David W. Tarrant, manager of commercial truck strategy for Ford Motor Company, will serve as the business and strategy director for the Blue Diamond joint venture. He noted, "This partnership creates many new opportunities for both parent companies to better manage and participate in the worldwide commercial truck business. We are looking at a number of exciting ideas which will be developed in the next several years."

Another element of the joint venture is service parts support, led by Navistar's Tim Cooney, newly appointed general manager. Cooney indicated that significant opportunities exist to provide high quality product support to customers of the new vehicles, while both companies will pursue other areas of synergy.

Each company will have equal representation on the venture's eight-person executive board, and neither company will have an equity stake in the other's parent company. Dan Ustian, president of International Truck and Engine Corporation's engine group, will serve as chairman of the executive board.

Ford board members include: Gurminder Bedi, vice president, North American Truck; Mike Jordan, president, Ford Motor Company's Automotive Consumer Services Group, Gerry Meridith, controller, North American Truck; and Leo Shedden, director, North American Truck Vehicle Programs.

Other Navistar board members are Robert Lannert, executive vice president and chief financial officer; Steve Keate, president, International truck group; and Wayne Krzysiak, vice president and general manager, parts operations. As previously reported, the Ford and Navistar joint venture will explore additional business ventures for diesel truck engine products for global markets.

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