Ford, Navistar Join Forces to Create Blue Diamond Truck Company

    DEARBORN, Mich., Aug. 7 Ford Motor Company and
Navistar International Corporation today finalized plans to form a
joint venture to build medium commercial trucks.  The joint venture will also
furnish truck and diesel engine service parts to Ford and International and
explore other advanced diesel engine opportunities.
    
    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(R) brand. The
trucks will be produced at Navistar's plant in Escobedo, Mexico.  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 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 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.  No additional details are available at this time.
    It has been determined that the joint venture does not require regulatory
approval.