Navistar International will close its Indianapolis engine plant and Indianapolis Casting Corp. foundry because the company is ending its diesel engine supply agreement with Ford.
Navistar intends to cease operations at its Indianapolis campus as of July 31, 2009.

The two companies announced earlier this month that they had reached an agreement to end litigation between the two, including ending their decades-old diesel engine supply partnership, where Navistar supplied PowerStroke diesel engines for Ford pickups, effective Dec. 31, 2009.

"This is a difficult decision because of the impact it has on our employees and the community where we live and work," said Eric Tech, vice president and general manager, Navistar Engine Group. "But the significant change in Ford's business plans has forced us to make this decision."

Navistar will continue to produce diesel engines for Ford through 2009. The companies also will continue to collaborate on a range of initiatives, including their existing Blue Diamond Truck and Parts joint ventures and their diesel engine supply agreement in South America.

Navistar has continued to ensure the viability of its engine business through expansion into China and India, as well as a broadening of product offerings through the introduction of the MaxxForce 11/13 and plans to produce a proprietary 15-liter engine.