CHICAGO -- Navistar International Corp. on Monday said it was close to settling a dispute with Ford Motor Co. over Ford's decision to discontinue a V-6 diesel engine program that Navistar had agreed to supply.
Navistar, a truck and engine maker, is seeking reimbursement from Ford to recover investment and development costs for the engine.
"We are in discussions. We hope to have a successful conclusion soon," said Navistar spokesman Roy Wiley.
Wiley said an agreement with Ford was expected before the end of Navistar's fiscal second quarter, which ends April 30.
A Ford spokesman declined to comment on the status of the talks.
Navistar last month said it expected to record a loss in the second quarter of 25 cents to 30 cents a share, assuming it reaches a "favorable" agreement with Ford on compensation for the delayed V-6 program.
Navistar already supplies Ford with V-8 diesel engines for its F-Series Super Duty pickups under an exclusive contract that runs through 2012.
It was preparing to supply V-6 diesels for some of the automaker's smaller pickups and SUVs when Ford notified the company in October of its decision to postpone plans for the new engine after determining the business was no longer viable.
Navistar recorded $170 million in one-time charges last year to write off pre-production and fixed asset costs related to the V-6 engine launch.
The engines were to be built at Navistar's two-year-old Huntsville, Ala., plant, where it produces the V-8 engines it supplies to Ford as well as for its own line of International brand trucks. About 150 people work at the plant.
Navistar also produces medium-duty trucks for Ford in Mexico under a joint venture called Blue Diamond.