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Ford and Navistar Forming Medium Truck Joint Venture

August 8, 2001

Ford and Navistar have announced plans to form a joint venture to build Class 6 and 7 medium commercial trucks.The joint venture will also supply truck and diesel engine service parts to Ford and International and "explore other advanced diesel engine opportunities," according to a statement released by the two companies.The newly-named Blue Diamond Truck Company LLC will initially produce medium commercial trucks that will be marketed independently under the Ford and International brands.The trucks will be produced at Navistar's plant in Escobedo, Mexico, and Blue Diamond plans to expand the range for both companies.Ford and Navistar are both contributing intellectual property to the joint venture while Navistar is contributing a major portion of its Escobedo truck manufacturing facility and Ford is making a cash contribution to the 50-50 joint venture. No financial details are being released.According to the general manager of the truck joint venture, Jack Allen, 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 emphasised that the cabs, interiors, badging and other brand characteristics will be kept distinctly Ford or International.The International-branded trucks will exclusively use International's inline 6 or V-8 engines but Ford versions will offer either International diesel engines or other makes as options. International bills itself as the worldwide 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 model due in 2003.For competitive reasons, no other details will be revealed until products are market-ready, according to Allen."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.Ford's manager of commercial truck strategy, David Tarrant, will serve as the business and strategy director for Blue Diamond.Another element of the joint venture is service parts support, led by Navistar's newly appointed general manager Tim Cooney who said that significant opportunities exist to provide product support to customers of the new vehicles.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.The president of International Truck and Engine Corporation's engine group, Dan Ustian, will serve as chairman of the executive board.
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