Diesel engine supplier Navistar International will close its Indianapolis engine plant and foundry this summer as it prepares to end its contract with Ford Motor Co.
The truck engine plant and the Indianapolis Casting Corp. foundry will close July 31, Navistar said today.
In a statement, Navistar Vice President Eric Tech blamed the decision on the significant change in Fords business plans.
Navistar has supplied Ford since 1979, but two weeks ago the companies settled a years-long dispute over development of the next-generation Ford F-150 pickup.
Ford broke a contract by planning to make its own diesel engine, Navistar said, after Navistar had spent millions of dollars to develop a Ford engine code-named Lion. Navistar sued Ford, and both companies also filed lawsuits over pricing and warranty claims related to Navistars current engines.
In the settlement, Ford agreed to pay Navistar an undisclosed amount, while Navistar will end its North American contract with Ford at year end.
The companies will maintain their medium-duty Blue Diamond Truck and Parts joint venture, along with their South American engine supply contract.
Navistar, of Warrenville, Ill., ranks No. 52 on the Automotive News list of top 100 global suppliers. The companys 2007 worldwide sales to automakers reached an estimated $3.3 billion.
Reuters contributed to this report