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My understanding with the Northstar is that while it does have some design weaknesses, the biggest concern is weak head bolts. Those headbolts are easily replaced with an upgraded bolt and the problem is permanently eliminated. Once that's done, they have the potential to be a really powerful drivetrain. As far as why they would be used in a swap instead of an LS4 is because they have the only FWD transaxle that's actually built to handle that amount of power.
Then theres the "dime a dozen" factor...you can find old rusty Caddy's on pretty much every corner.
 

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1999 3.0 SilFro
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Or an InTech out of a Lincoln?
 
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