A state circuit court in Oakland County, Michigan, has ordered Navistar International Corp. to continue producing PowerStroke diesel engines for Ford’s new Super Duty pickup truck until it has heard oral arguments in a contract dispute that is sure to drag on for months, if not years.

Ford Motor Co.
Engine lawsuit centers on emissions.

Claiming that it eventually would be underpaid for the new clean-diesel engines, Navistar stopped production in late February. Ford previously had filed suit, alleging Navistar did not share warranty costs for older, 6.0-liter engines and demanded higher prices that were “not justified” for newer, 6.4L units designed to meet 2007 regulations. Ford is seeking undisclosed damages for breach of contract.

The two have worked together for nearly 30 years and have a lot riding on the Super Duty. Both need the profitable truck to bolster Ford’s heavy-duty market share, which nearly equals the combined segment sales of Chevy and Dodge. The Feb. 28 temporary restraining order, which keeps trucks flowing to dealers, “will further the public interest,” said Judge John J. McDonald.

Emission controls are at the heart of the dispute. Their development cost hundreds of millions of dollars that Ford was unwilling to share, Navistar claims. A “desperate” Ford then submitted “bogus” warranty claims after forcing dealers to make unnecessarily expensive engine repairs, like replacing turbochargers instead of just fixing cheaper fuel injectors. Finally, the engine maker says Ford “dragged its feet” on 2010 designs, which require even tighter pollution controls.

Ford has called the PowerStroke “a great engine” and says it currently is not looking for another supplier.