"The motor is not good."
Translation:El motor no es bueno.
I don't see any problem with no está bueno, but no es bien is impossible for grammatical reason. bien = well is an adverb and cannot go after es (the verb ser). You can say El motor no está bien, but it means The motor is not fine ≃ The motor doesn't feel well
I've been told that ser generally refers to static state... soy un gringo, soy blanco. Estar can be used for condition to refer to temporary, unusual, scenarios. Yo fui a la playa, estoy rojo. Happily i think whoever you were talking to about this motor would know what you meant but a little context would help if Duo wants you to go a specific route.
Could be either, depending on the meaning you want.
"El motor no es bueno" could mean something like, "This motor is not good; that model of motor always has issues and I never recommend it."
"El motor no está bueno" would mean this particular* motor is broken, for example.