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Navistar Closing Plants, Cutting 700 Jobs

Company plans to end operations at its Indianapolis engine plant and its Indianapolis Casting Corp. foundry as of July 31, costing 700 workers their jobs.

WARRENVILLE, Ill. (AP) -- Navistar International Corp. said Tuesday it will close its Indianapolis engine plant and Indianapolis Casting Corp. foundry following cancellation of its diesel supply agreement with Ford Motor Co.

The moves are expected to result in the elimination of about 700 hourly and salaried jobs, the company said.

Earlier this month, Ford and Navistar said they would end the supply agreement, but added that they would continue to collaborate on other projects as part of a deal intended to settle their ongoing litigation.

Ford had been the Indianapolis facilities' primary customer. Navistar said Tuesday that it plans to end operations at the facilities as of July 31.

Navistar said it will continue to produce diesel engines for Ford through 2009 and work with the automaker on a number of projects including two existing joint ventures and an engine-supply agreement in South America.

In January 2007, Ford sued Warrenville, Ill.-based Navistar, alleging the engine and truck maker failed to pay its share of recalls and repair costs from the diesel engine used in the 2002-2007 model years.

Navistar then sued the automaker for alleged breach of contract and refiled the lawsuit in 2008 after mediation failed to settle the dispute.

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