GM may be looking to sell MED duty line.....

[WGLR13MWZ]

What do you think this will do to the Medium duty market?

 

Quote:

General Motors is in talks to sell its medium-duty truck line to International Truck and Engine in a bid to focus on its core car and light truck business, reported The Flint Journal.

 

Although neither GM nor International would confirm the report, a UAW representative told The Flint Journal he is aware of conversations between GM and International’s parent company Navistar.

 

Investment banking firm Bear Stearns noted in January that a medium-duty divesture would be a tempting proposition for the auto giant.

 

“A sale of GM’s medium-duty facility in Flint [is] both logical and increasingly likely as GM turns its focus to just cars and light trucks,” stated Bear Stearns.

 

Of the OEMs that could be prospective buyers of the GM commercial vehicle operation, Bear Stearns said International would strategically be the best fit “should [its relationship with Ford] sour further.” Bear Stearns was referring to Navistar’s ongoing dispute with Ford over payment, which prompted International to halt deliveries of its diesel engines that power Ford Super Duty pickups.

 

Bear Stearns speculated on a GM medium-duty divesture when the company announced it’s open to selling its lucrative Allison operation, a dominant player in the transmission market for medium- and heavy-duty trucks.

 

The Flint Journal reported that the potential sale would shift volumes from the Flint facility to International’s operation in the Midwest. Bear Stearns noted that such a move would boost Navistar’s capacity utilization.

 

Analyst Chris Brady, president of Commercial Motor Vehicle Consulting, said that GM’s medium-duty lineup is not so complementary to Navistar’s.

 

“I don’t see what International stands to gain since the GM product line is a conventional cab,” Brady told FleetOwner. “Navistar has a conventional product.”

 

Volvo AB, which lacks a medium-duty product in North America would be a better fit from a product standpoint, Brady said. In February, Volvo AB reported its acquisition of 96% of Nissan Diesel shares, a move that boosted its presence in Asia as well as its global medium-duty volume to about 38,000 units annually. This volume is still a far cry from 126,000 unit volume of DaimlerChrysler and 90,000 by GM-Isuzu based on 2005 data.

 

But GM is certain to sell its medium-duty operation when it receives the right offer, Brady noted.

 

“It’s a small part of their overall business and competition is increasing in the medium-duty segment,” Brady said. “The investment needed to make the [medium-duty] product line competitive will probably increase and they will need all the resources they can get to turn around their automotive business. GM is looking at the competition increasing and asking themselves where do they want to spend their resources— in commercial vehicle or their automotive business. The choice is obvious.”

[gasgasman]

Remember Ford did the same thing when the sold out to Sterling.

[LARRY BRUDZYNSKI]

Ford also did it with the F650-F750 line. It still says Ford but is really a Navistar just rebodied. Give me they days of the F600,F700,F800.

[WGLR13MWZ]

Ford also did it with the F650-F750 line. It still says Ford but is really a Navistar just rebodied. Give me they days of the F600,F700,F800.

Larry,

 

I could as much agree with you as disagree with you. The joint venture between Ford and International - Blue Diamond builds the trucks along with the LCF and the 4000 series Internationals down in Escobedo, Mexico. They offer the same common chassis with different wiring systems and cab systems. We use an older wiring method where International uses multiplexing.

 

I would rather have the trucks of today as it has given Ford dealers the opportunity to have access to the International PDC system. They opportunity for sales, profit, and customer service from the International PDCs is far more in line with the industry that Ford ever was. In fact if Ford was still around with their 600, 700, and etc. they would be so far behind. Ford and most of its dealers do not have the mind set to compete in the medium duty segment. They work on Fords......and Fords only. If you go to a competing dealer, International, Freightliner, Pete, KW, and etc. they are working on everything. I mean everything. probably only 50-60 percent of what is in the shop is their OEM if they are a single line dealer. There is only one Ford dealer in Houston that is willing to work on med or heavy other than Fords. That’s out of 40 plus dealers in the Houston metro area. The International PDC offers parts for trucks other than Fords. Something that Ford was poor at offering in the FLAM days.

 

All that aside, I can see the sentimental value of the older trucks, but from a stand point of making a living...I like today.