Thursday, March 1, 2007

Dissecting Conservative Edge’s Debate

Gov. Ernie Fletcher

What direction/vision will you establish for the Commonwealth in a second term?

I intend to continue the progress that the commonwealth has seen in the first term of my administration. My administration has created a culture of life that provides further protection of all children, born and unborn. We confronted a $1 billion deficit and generated an over $700 million surplus through efficient management. We have reduced the number of state workers by over 2,000 through attrition only.

We have dedicated the surplus to building the rainy day fund to its highest level in the history of the commonwealth, sound fiscal management that has been recognized by Wall Street, allowing the state to refinance bonds and generate additional funds to fund state needs. We have cut personal and corporate income taxes. When I came to office the state was in a financial crisis. Education funding had flatlined for the last ten years because a substantial portion of every new dollar generated had to be dedicated to the skyrocketing costs of Medicaid. We have cleaned up this mess by reforming Medicaid, cutting taxes and running government efficiently, and now have the state in a position to build for the future.

There is work to be done to make higher education affordable for Kentuckians and continue to move healthcare in the state to a more transparent and market-based system, which I mentioned in the State of the Commonwealth and will discuss in the coming months.

Progress? Ethics scandal. Plea bargain. Political infighting. Excessive spending. What would you label failure?

Education funding? Throwing money toward a problem is not an answer.


How can we improve our education system? Are there ways that you plan to make higher education a priority and easier to attain for young people?

Education is a priority of the Fletcher administration. Unlike many politicians that make this claim, we've put our money where our mouth is. Thanks to the more stable financial foundation we have created, we have been able to provide record funding to education.

P-12 education funding is receiving record increases after a decade of flat funding. This revenue has not just gone blindly into the system, but to establish better tools of accountability. We have invested in the technology necessary to create a statewide system of longitudinal tracking, so we track in real time student performance, available on the web, and identify a student that needs intervention before it's too late. I have advocated directing enhanced compensation to teachers that volunteer to teach subjects of critical need or at low-performing schools, and will continue my efforts to make Kentucky a place where good teachers want to work.

Postsecondary education base funding has seen a 20% average annual increase during this administration compared to the previous eight years. Post secondary education capital funding has received a 120% average annual increase over the previous eight years, while maintaining a responsible debt level for the state, below 6% of revenues. Despite these funding increases, tuition continues to rise. In my State of the Commonwealth speech, I called for the creation of a Kentucky Covenant, a pact with Kentucky students that if they work hard, earn good grades and take rigorous courses, that we will guarantee an affordable college education in this state regardless of financial means. Using part of the reserve of the surplus, we can build a program to accomplish this goal.

Education is a priority? You mean merit hiring was a priority. Money is not an answer. Where is his school choice policy?

Will you support an amendment to expand gambling in Kentucky?

As I have consistently stated in the past, I will not advocate an amendment to expand casino gambling. Should the legislature choose to offer the issue to the voters, I would support allowing the voters to decide this issue. I would not vote for the amendment. Further, I do not believe it would have a significant positive economic impact on our state.

Finally, a correct answer. Casino gambling is not a magical solution.

Are you open to repealing the Alternative Minimum Tax?

We cut income taxes for 78% of working Kentuckians. We cut the corporate income tax from 8.25% to 6%. We repealed the corporate licensing tax which is a tax on investment. In 2006, we reduced the AMT by $45 million. We are always looking for ways to lower taxes further.

Governor, I believe this was an answer. However, not for this question. Obviously, Fletcher opposes repealing the tax. Disgraceful!

Congresswoman Anne Northup

What is your overall vision for Kentucky’s future?

Our vision is a state government committed to honesty, an administration that does not inflate numbers and facts to cover up the truth. We believe in a state government that tackles the most serious problems, lays out a plan, considers the public’s support, and reaches consensus. Instead of spending our days in office touring the state, and paving new blacktop, Jeff and I want to solve the problems affecting Kentucky. We believe there is a better way to educate our children—because our schools lag behind. We believe there is a better way to bring health care costs down—because costs are out of control. We believe our tax burden is too high—because the current administration has imposed the AMC.

Her vision includes Fletcher losing. Her vision also includes her winning. Is that a vision?

Why should Kentuckians elect Ann Northup?


I can win in May and I can win in November, while Ernie Fletcher cannot. After strong consideration and encouragement from fellow Republicans, I decided to enter the race for Governor of Kentucky. The Republican Party deserves a nominee who will be able to spend the general election talking about the needs of our education system, not raising money for a secretive legal defense fund. The Republican Party deserves a nominee who will be able to address a real solution to the skyrocketing health insurance rates not defending investigations. The Republican Party needs a nominee and Kentucky needs a Governor who can focus the attention of the entire state on our pressing needs, not divert attention from a government besieged by scandal.

Anne wins fifty dollars. She said the secret phrase. “Fletcher can’t win, Fletcher can’t win, Fletcher can’t win.”

What will be your stance on expanded gambling?


Having voted against the lottery, I have said it would be a tough sell for me personally-- but this is an issue for the legislature.

Finally, a policy statement.

Do you think that Kentucky’s tax system needs further overhaul? (Specifically the AMT, what would you do with it and how can we restructure the tax system to encourage more job creation in Kentucky?)


I have vocally announced my support of House Bill 88 sponsored by my running mate Jeff Hoover. The AMT has provided a disincentive for small business growth and has shrunk entrepreneurial spirit in this state. The role of state government is to spur economic growth and not tax small business only to use the additional revenue to spend on pet projects, no matter how worthy they may seem. The money belongs in the pockets of the people that earn it, not the government.

Queen Anne is for the people. Unbelievable!

Businessman Billy Harper


During your campaign you have made it clear that you would eliminate the Alternative Minimum Tax – how will that affect the projected surplus for Kentucky’s budget and how would you propose allocating that surplus?

Short term, the Alternative Minimum Tax will bring in less money to a government which is already spending too much. Long term, the repeal of the tax will help create more economic activity in Kentucky, which in turn will generate far more money through additional business taxes and personal income taxes from workers who now have better jobs. I would allocate the surplus only to projects that are vital to Kentucky’s future. Most important will be education and improving the state’s economy. If the program is not vital then the money should be where it belongs – with the hard working taxpayer.

Excellent answer. Tighten spending.

Why is Kentucky’s education system struggling?

It’s not that Kentucky’s education system is so poor as much as its improvements are not happening fast enough. There have been some improvements. But anyone who has read the book "Good to Great" knows that Kentucky is a good state that needs to become a great one. It is no longer acceptable for our state to settle for mediocrity. It’s now time we educate our workforce and create better jobs to keep Kentucky moving forward.

As I have stated, Kentucky education is funded. The dollars must be made to work.

Would you support an amendment to allow expanded gambling?


No. I will veto any legislation and campaign against a constitutional amendment to expand gambling in Kentucky. As a businessman, I can tell you that using gambling to fund our state’s future is like building an economy on quicksand, and I just won’t do it.

Candidates in unison…. Gambling is bad.

What quality do you bring that no other candidate has in this race and how will that quality make Kentucky a better place in four years?


I’m not a politician. I’m a businessman. We have tried the same old thing year after year, and Kentucky has made only small improvements. It’s time we start to think big in Kentucky. It’s time we do things differently. Politics as usual just won’t work anymore I’m the only candidate in this race who has created jobs and met multi-million dollar payrolls right here in Kentucky. I’m the only candidate with decades of hands-on management experience. And I’m the only candidate who has led the fight for education reform. The others in this race have only talked about these things.

I’m not a politician. I’m a leader. Politics as usual won’t work. I before E except after C. It’s the fortune cookie candidate.

New Video

Biting Legislation – Part Two

House passes HPV vaccine bill

Under a measure approved by the House of Representatives yesterday, all Kentucky middle school girls would be vaccinated against a virus that causes cervical cancer &mdash unless their parents sign a form saying they object to the vaccine.

Controversial end with laudible means. Teenagers are sexually active. This will not change. Governor Fletcher, sign this bill.

Senate panel OKs bill requiring more information before abortions

Women seeking abortions would be informed about fetal pain and use of anesthesia in prenatal surgeries under a bill headed to the Kentucky Senate. The measure, which easily cleared the Senate Judiciary Committee Wednesday, would add to the information given to women before they undergo abortions. The bill says the new material would inform women that by 20 weeks gestation the "unborn child has the physical structures necessary to experience pain."

Emotional decisions are rapid. Women should view the entire picture. Sign this bill!

Bill would make more child-sex crimes a felony

Those who commit any sexual offense against a child under 16 — and those who fail to report such abuse — could be charged with felonies under a bill filed by Rep. Mary Lou Marzian, D-Louisville. Making such actions a felony would allow prosecutions decades after the crimes occurred. Victims of sexual abuse have sought this change because they say it often takes years for those traumatized as children to seek justice, beyond the statute of limitations.

Why are these crimes not felonies?

Cost of senior judges has ballooned

When legislators were asked to approve the senior status judge program seven years ago, it was sold as a cost-efficient way to clear growing case backlogs. At a cost of $420,000 a year to taxpayers, a pool of around 25 retired judges would work part time in exchange for an enhanced retirement benefit of several thousand dollars, they were told. Today, there are 45 senior judges, and the Judicial Form Retirement System will pay out at least $1.57 million for the program this year, according to a Herald-Leader computer analysis of publicly available data.

Governor wishes to slice spending? Commence with this program.

House passes bill proposing amendment allowing felons to vote

Felons would automatically have their voting rights restored, once they had served their sentences and paid their fines, under a proposed constitutional amendment approved by the House of Representatives Wednesday. The change would not apply to those who have been convicted of murder or a sexual crime against a minor.

Imagine a murder in the booth next door… Governor Fletcher should veto.

House passes bill allowing victims' spouses to sue for loss of companionship

Widows and widowers of accident victims would be able to sue for loss of companionship under a bill approved Wednesday by the House of Representatives. Under current law, spouses may sue for economic damages when their partner dies in an accident, but they can't sue for the loss of the relationship. "Our law is just basically patently unfair to anyone who loses a spouse," argued Rep. Rob Wilkey, D-Scottsville, who sponsored the bill.

A bill which ceases pain. Congratulations, legislature.

House panel approves 70 mph speeding limit change

A Senate-passed bill allowing motorists to drive faster on most stretches of interstates and parkways in Kentucky won approval from a House panel Tuesday. The House Transportation Committee revised the bill to specifically list which stretches of interstates and parkways could have a 70 mph speed limit.

Yeah, teenagers need a reason for speeding.

Biting Legislation – Part One

House approves wage increase

The Kentucky House of Representatives overwhelmingly approved a measure yesterday to raise the minimum wage to $7.25 an hour over the next two years. "It's the right thing to do," said Rep. J.R. Gray, D-Benton, the bill's sponsor. "It's the moral thing to do."

When the minimum wage increases, every price increases. Employers slash payroll by firing or not hiring workers. Governor Fletcher’s decision?

Servers would get 3 cents an hour more

Restaurant owners would have to pay servers 3 cents an hour more under a bill unanimously approved by the House Labor and Industry Committee. Servers now earn $2.13 an hour plus tips. Under the bill approved yesterday, they would earn 42 percent of minimum wage, which currently is $5.15. Their hourly rate would be $2.16.

Their dream of a college education realized…

Budget bill excludes Horse Park

A House bill amending the state's two-year budget does not include $38 million for an outdoor stadium and other improvements at the Kentucky Horse Park, although it does appropriate money for a new runway at Blue Grass Airport and allows the University of Kentucky to purchase Samaritan Hospital.

I oppose frivolous spending. With that stated, God forbid we promote Kentucky through tourism.

Almost $12.5 million given to breeders

Kentucky thoroughbreds earned almost $12.5 million in bonuses from the state last year from a new fund designed to act as a big carrot to breeders. "This amount is proof that the fund is providing results and will help maintain Kentucky's status again as the Horse Capital of the world," said Gov. Ernie yesterday at a press conference to announce the first payouts from the Kentucky Breeders' Incentive Fund, which is funded by the tax revenue paid on stud fees.

Granted, we are a horse bastion. However, invest $12.5 million in education.

Seum bill targets MSD for stricter oversight

A bill to establish state controls over the Metropolitan Sewer District has been introduced by state Sen. Dan Seum, R-Louisville. The bill would make MSD rate increases subject to the approval of the state Public Service Commission and require an annual audit of MSD’s books by the state auditor’s office. The bill also would also change the way the MSD board is appointed. The city’s mayor currently appoints all eight members.

Is anyone interested?

Boat tax-exemption bill may be dead in the water

An attempt to exempt big-boat owners from paying property taxes on their houseboats and cruisers looks like it's sunk for this legislative session, but supporters say they won't give up. House Bill 466 would remove from state law language that allows local taxing entities, such as school and fire districts, to veto tax exemptions for boats registered with the federal government.

Property taxes for boats? Boats do not reside on property.

State May Lift Election Day Ban of Liquor Sales

A generations-old Kentucky law that bans the sale of liquor on Election Day would be lifted under legislation proposed by a Covington lawmaker. That law, which dates back to the days of prohibition when temperance leagues vilified alcohol in all forms, is antiquated and needs to be changed, said state Rep. Arnold Simpson, a Democrat. "I mean, we're in the 21st Century," Simpson said. "Liquor sales are a very important component of our business community and having a prohibition on any day for any period without a legitimate state interest I think is reprehensible."

Another case of Government limited. Legislation is not required. Simply purchase on the day before.

Steve Pence: Your Tax Dollars At Work

Steve Pence has not resigned. His state responsibilities have been revoked. Two of his staffers have resigned. The third is on maternity leave.

Pence has no responsibilities. Pence has no staff.

However, he is campaigning for Anne Northup. You’re paying his expenses.

Pence has said he will not quit. Fine. Kentuckians should not pay. They should not bare responsibility for Northup’s campaign.

Immediately, Northup should assume payment. Parasite Pence should not suck Kentucky for the next three months.

Pence: Soldier of Political Convenience

Steve Pence is pathetic.

After endorsing Anne Northup, he voices his concerns? Today, he condemns Ernie Fletcher’s ethics? He theorizes a grand conspiracy? Please!

Pence is not a man of conscience. He is a politician of convenience. The truth is, Pence did not have concerns, does not have concerns, and never had concerns. If Pence were disturbed with Fletcher’s actions, he could have resigned. If he were a man of conscience, he would have done this. He would have marched into Fletcher’s office, chastised him, resigned, and publicly condemned the Governor. He sat silent.

He remains Lieutenant Governor. If he were a man of conscience, he would resign now. Instead, he attacks from his elected office. His actions are not courageous. They are cheap and tactical. Pence is a wretched human being. He should resign. Someone truly concerned for Kentucky would have.


From the Lexington Herald-Leader:

Lt. Gov. Steve Pence, who in four years has gone from cheerleader for Gov. Ernie Fletcher to stern critic, said two of the governor's key acts in response to the state hiring investigation were cover-ups.

Pence told the Herald-Leader in an exclusive interview that he thought Fletcher decided to issue pardons on Aug. 29, 2005, as a way to keep the probe from incriminating anyone in the governor's office. "I'm quite confident that there was a fear about how high it would go up in this administration," Pence said.

He also said that the deal Fletcher later struck with Attorney General Greg Stumbo to end the hiring investigation was made "to keep anything else from coming out."

Pence -- in detailing for the first time his frustrations with Fletcher's handling of the hiring investigation -- traced his estrangement with Fletcher to late August 2005, a crucial point at which the administration was trying to hammer out its strategy to respond to the growing political crisis. At that time, Pence said he and others in the administration had argued against taking the drastic step of issuing pardons, and thought Fletcher had agreed.

But suddenly, Pence said, he received a call Aug. 29 that Fletcher would have a rally in the Capitol Rotunda that night to announce that he was granting broad amnesty to his entire administration. He said he thinks Fletcher was following advice from his chief of staff, Stan Cave. "I do not know what caused him to do that on that day," Pence said. "I will tell you this: I know that he was meeting with Stan. I think Stan Cave had a lot to do with the decision."

From the Louisville Courier-Journal:

Lt. Gov. Steve Pence yesterday stepped up his criticism of Gov. Ernie Fletcher's response to the political patronage investigation that rocked the administration and caused the two to part ways politically nine months ago.

"We can all have different opinions on what all this means," Pence said in an interview. "But the facts are what they are. The fact is the pardons happened. The fact is he did take the Fifth (Amendment before a grand jury). The fact is he was indicted. The fact is he does have a legal defense fund. The fact is he said we were going to get to the unvarnished truth, but we didn't."

On Monday Pence, who was elected with Fletcher in 2003 on a slate that promised to "clean up the mess in Frankfort," endorsed one of Fletcher's rivals in this year's Republican primary for governor, former U.S. Rep. Anne Northup of Louisville. In doing so he criticized the governor's decision to cut a deal to have misdemeanor charges against him dismissed and said it had "made the truth near impossible to find."

"I said at the first news conference when the governor was overseas, 'We are going to get to the bottom of this. This governor gets it when it comes to integrity and stopping this good-old-boy system,'" Pence said. "The governor's words were, and they were parroted by me and many others at the time, that we are going to find the unvarnished truth. That did not happen."

Brett Hall Assails Anne, Labels Pence (Liar)

If anyone ever had concerns about Lt. Gov. Steve Pence’s inability to tell the truth, they were validated with his exclusive interview in the Lexington Herald-Leader.

His absurd account of the August 2005 meetings with Gov. Ernie Fletcher on blanket amnesty in the so-called merit hiring investigation can be easily undone due to the fact that there are several witnesses whose recollections run counter to Pence’s.

This is how Pence repays Fletcher, the first governor in memory to make his lieutenant governor relevant by making him a cabinet secretary along with providing an executive staff, including two press aides. Another lesson that in politics no good deed goes unpunished?

The larger question remains: Why did the Anne Northup campaign not wait until a more opportune time to play the Pence card, such as in April when voters were actually paying attention? She plans to drop other endorsements soon, as well. Something a campaign would wait until later for maximum effect. Again, why now?

Answer: A desperate lack of campaign dollars.

Follow the money and you will see that things aren’t going as planned for Northup’s campaign. Fletcher is raising money at a prodigious pace with major fund-raisers across the state. Where is Northup in raising campaign cash? If a recent fund-raiser in Christian County is any indication, she’s in trouble.

Unable to find a local sponsor to host her fund-raiser in the Hopkinsville area, Northup had to hold her event in a bed and breakfast. Price per ticket was a mere $100. Fewer than a couple of dozen attended, including freebies. Not a good sign. Friday night in Shelbyville, a record 325 people paid to hear Republican candidates speak. Similar numbers turned out last weekend in Rockcastle, Oldham, Pulaski, Nelson and other counties where Northup and her entourage were met with roomfuls of Fletcher supporters.

The Franklin County Lincoln Day event nearly two weeks ago was supposed to be a Northup romp, but turned into a completely different direction as Fletcher supporters flooded the room. On top of that, Larry Forgy turned in a virtuoso performance with his keynote speech, energizing the Fletcher crowd to evangelical fervor.

What’s odd is no newspaper is reporting the overwhelming support for Fletcher at this year’s Lincoln Day dinners. From the looks on the Northup crew’s faces, they would just as soon not see this development reported in the news either. The Republican Party in Kentucky is as energized as I’ve ever seen it, and the vast majority is for Fletcher, says one person who has gone to most of the Lincoln Day events this campaign season.

Fletcher supporters dominate while Northup and (Billy) Harper are about even in support from the people who are going to these events I’ve been to, which tends to be a good indication of where the primary voters are right now, adds another who has attended as many Lincoln Day banquets.

What it all adds up to is good news for Fletcher and bad news for both Northup and Harper, according to those who have traveled Kentucky the past 90 days since campaigning began in earnest for governor and the down-ballot constitutional offices.

There is next to no support for Northup outside of Louisville that I have seen, and voter energy is on Fletcher’s side, pure and simple, says a third source. All three GOP veterans say Northup’s message of Ernie can’t win isn’t gaining much traction with Republican faithful. She’s never said once what she would do if elected, and that doesn’t sit well with people I’ve talk with. Eventually, she’ll have to start talking issues.

Given the discouraging signs for Northup, it’s no wonder she and her campaign mentors decided to play the Pence card so early. It may be an act of desperation in hopes of jump-starting her fund-raising and stunting the incumbent’s. The collateral damage is greater intra-party discord that could linger beyond the primary.

What remains to be seen is whether Pence adds any credibility to Northup’s candidacy and her negative messaging. Of course, in order for Pence to give her that edge he would have to have credibility, something he lacks.

Conservative Edge Probes Raggedy Anne’s Fundraising

This is part of an article written by Brett Hall. (Hall is a former press secretary for Governor Fletcher): The larger question remains: Why did the Anne Northup campaign not wait until a more opportune time to play the Pence card, such as in April when voters were actually paying attention? She plans to drop other endorsements soon, as well.

Something a campaign would wait until later for maximum effect. Again, why now? Answer: A desperate lack of campaign dollars. Follow the money and you will see that things aren't going as planned for Northup's campaign. Fletcher is raising money at a prodigious pace with major fund-raisers across the state.

Where is Northup in raising campaign cash? If a recent fund-raiser in Christian County is any indication, she's in trouble. Unable to find a local sponsor to host her fund-raiser in the Hopkinsville area, Northup had to hold her event in a bed and breakfast. Price per ticket was a mere $100. Fewer than a couple of dozen attended, including freebies. Not a good sign. Friday night in Shelbyville, a record 325 people paid to hear Republican candidates speak.

Similar numbers turned out last weekend in Rockcastle, Oldham, Pulaski, Nelson and other counties where Northup and her entourage were met with roomfuls of Fletcher supporters. The Franklin County Lincoln Day event nearly two weeks ago was supposed to be a Northup romp, but turned into a completely different direction as Fletcher supporters flooded the room.

On top of that, Larry Forgy turned in a virtuoso performance with his keynote speech, energizing the Fletcher crowd to evangelical fervor. What's odd is no newspaper is reporting the overwhelming support for Fletcher at this year's Lincoln Day dinners. From the looks on the Northup crew's faces, they would just as soon not see this development reported in the news either.

The Republican Party in Kentucky is as energized as I've ever seen it, and the vast majority is for Fletcher, says one person who has gone to most of the Lincoln Day events this campaign season. Fletcher supporters dominate while Northup and (Billy) Harper are about even in support from the people who are going to these events I've been to, which tends to be a good indication of where the primary voters are right now, adds another who has attended as many Lincoln Day banquets.

What it all adds up to is good news for Fletcher and bad news for both Northup and Harper, according to those who have traveled Kentucky the past 90 days since campaigning began in earnest for governor and the down-ballot constitutional offices. There is next to no support for Northup outside of Louisville that I have seen, and voter energy is on Fletcher?s side, pure and simple, says a third source. All three GOP veterans say Northup's message of "Ernie can't win" isn't gaining much traction with Republican faithful. She's never said once what she would do if elected, and that doesn't sit well with people I've talk with.

Eventually, she'll have to start talking issues. Given the discouraging signs for Northup, it's no wonder she and her campaign mentors decided to play the Pence card so early. It may be an act of desperation in hopes of jump-starting her fund-raising and stunting the incumbent's. The collateral damage is greater intra-party discord that could linger beyond the primary.

Gentleman, Fighting Over Engines

Wonder if the Governor is cognizant of this skirmish? We’ll know if Fletcher proposes more Fordfare.

From Louisville Courier-Journal:

A Michigan judge late tonight ordered Navistar to resume diesel engine shipments to Ford Motor Co.’s Kentucky Truck Plant on Chamberlain Lane, although the automaker still plans to temporarily cut production at the plant starting tomorrow.

"Once we start getting engines again, we’ll get back to our normal production schedule as soon as possible," Ford spokeswoman Becky Sanch said tonight. Earlier today, Sanch said Ford planned to cut some production tomorrow and cancel all work Friday on the F-Series Super Duty Trucks built at the plant.

Next week, Ford planned to run only one of three production shifts there because of tight engine supplies. Engine maker Navistar, of Warrenville, Ill., said Monday that it had ceased shipments of the 6.4-liter diesel engine used in the 2008 F-Series Super Duty trucks and idled its Indianapolis plant in a dispute with Ford over payments for the engines.

Its last load of engines arrived at Ford on Feb. 22. The diesels are the most popular engine option in the Super Duty because of their towing power. "With the state that Ford’s in right now, it seems to me that if you have a cash cow … you make sure that that plant works," said Scott Smith, an employee at the Kentucky Truck Plant. Analysts have said Ford’s Super Duty trucks are among its most profitable vehicles.

The plant is Ford’s largest North American factory and accounts for more than 5,000 of its 8,000 employees in Louisville. While plants are shut down, workers collect state unemployment insurance and supplemental payments from Ford that can total as much as 95 percent of typical wages, although workers said compensation doesn't always reach that goal. The production cut is particularly painful to Kentucky Truck workers. Last year, the plant was down several times as Ford adjusted output to match slowing demand for pickups.

Things had been looking up this year, however. Ford recently announced that orders for the 2008 truck were better than expected, and workers said they were looking forward to a steady production schedule again. Smith said he hopes the problems with Navistar inspire Ford to design and build its own diesel engine, as it does in Europe. Those engines are smaller and less powerful than the ones produced by Navistar, however, and are not suitable for the Super Duty. "We can’t keep being crippled by these vendors," Smith said.

Navistar stopped shipping engines to Ford because the automaker was not paying full price for the products. In January, Ford sued Navistar, saying the company failed to pay its share of repair costs from the problem-prone 6-liter diesel used in the 2002-2007 model years. In its suit, Ford said it was withholding some of those costs from payments to Navistar on the new engines. Oakland County (Mich.) Circuit Judge John McDonald granted Ford’s motion for a temporary restraining order, which requires Navistar to resume making and shipping diesel engines to Louisville, Sanch said.

But the judge’s order also requires Ford to stop withholding funds. Navistar spokesman Roy Wiley said, "We have no problem producing engines for Ford. We just want to be paid. They have not been paying for those engines because of the warranty dispute." Wiley declined to say how much money the companies are fighting over. "It’s a lot," Wiley said. "We wouldn’t do this if it were just a small number."

About 75 percent of the Super Duty trucks get diesel engines. The rest get V-8 or V-10 gasoline engines. Analysts have said neither company can afford to keep the dispute going. Ford needs the high profit margins found on diesel trucks, and Ford is Navistar’s biggest engine customer. Earlier this week, Bear Stearns analyst Peter Nesvold estimated that diesel trucks are worth about $11.6.billion in sales to Ford each year. The engines generate about $2.7 billion in revenue for Navistar.
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