GM Considering Sale Of Medium-Duty Truck Division To Isuzu

According to Automotive News, GM is planning to sell its medium-duty commercial truck division to Isuzu (Ed. Note to Automotive News: "Medium-Duty" is not the same thing as "Mid-Size." Please make a note of this. Thanks!). According to Isuzu representatives, they have not been contacted by General Motors regarding the possible deal, but said they would respond positively to the prospect. The news comes after Navistar backed out of a deal on GM medium-duty trucks which would mirror the sale of the Ford commercial truck division to Sterling in 1997, though GM is in a considerably different financial situation now than the big blue oval was back in the 90's. GM has of course had a long term relationship with Isuzu in the heavy truck business, even sharing ownership with Isuzu on the DMAX diesel plant in Ohio. Jalopnik Snap Judgement: If this rumor proves to be true, GM is working hard to put together cash and not letting the broken deal with Navistar stop them. The problem we see is that medium-duty trucks offer excellent return on investment as major systems have long life cycles and redesigns and retooling efforts are rare occurrences. Add to that long service lives with a healthy parts business and the building of trucks is a good business to be in. However, trucking faces hard times ahead as rising fuel prices drive down profitability and fleet operators are making current trucks last longer instead of buying new. On top of that the 2010 EPA regulations on diesel trucks are forcing major engineering expenditures, driving costs and complexity up. GM may be throwing the baby out with the bathwater when considering this deal, but it may be worth it to save the North American business, and who knows, the baby in this case might grow up to be an asshole anyway. We mean, he is a big movie star now. [AutoNews (Sub. req)]

Advertisement

Share This Story