Ford and Navistar International have said they reached an agreement to restructure their ongoing business relationship and settle all existing litigation between the companies.

As a result, they will end their current diesel engine supply agreement from 31 December 2009 but will continue to collaborate on a range of projects including their existing Blue Diamond Truck and Parts joint ventures.

Meanwhile, Navistar will acquire additional equity in the Blue Diamond joint ventures, which will continue to offer F-650 and F-750 medium duty trucks plus parts support for a variety of Ford products, including PowerStroke diesel engine-equipped trucks. Ford and Navistar also will continue their diesel engine supply deal in South America.

As a result of the agreement, Ford will make a payment to Navistar but details were not disclosed.

“Navistar and Ford benefited from a successful partnership that provided value to both companies for nearly three decades. However, it’s in our best interests to resolve our conflict and continue our relationship with each other in other areas,” said Dan Ustian, Navistar chairman, president and chief executive officer.

“The next phase of our relationship is consistent with Navistar’s strategy to diversify our customer base, while continuing to provide value to both companies through our existing joint ventures and our supply agreement in South America.”

“We are pleased to have reached an agreement with Navistar that we believe is in the best interest of both companies,” said Mark Fields, Ford’s president of The Americas. “This agreement comprehensively addresses our business relationship with Navistar and will help both companies focus on meeting the needs of our current and future truck customers.”