By on August 20, 2008

That has to be a Topkick in the head.GM's reported "done deal" to sell their medium-duty truck line to Navistar has fallen through. In a tersely worded press release – reprinted here in its entirety – GM stated:

Due to significant marketplace and economic changes, GM and Navistar have decided not to renew the memorandum of understanding to purchase GM's medium duty truck business, which has expired. GM will continue to run the medium duty business as it has in the past, including providing sales, service and marketing support to GM dealers for its medium duty trucks.

GM will continue to review strategic options for the business, including continued discussions with Navistar.

So what impact this will have on GM's finances, since you know they'd already counted this as part of the "as much as $17 billion" cash they were going to use to get them through the next year? Do they drop the price low enough to entice Navistar into buying? Or do they try to sell to someone like Mahindra and Mahindra? OR do they stay in the medium truck business and just lay off a bunch of workers like they have elsewhere and cut production to match sales? No matter what the final resolution, it won't be good for GM.

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14 Comments on “Navistar Backs Out of GM Deal...”

  • avatar

    I wonder if Navistar just doesn’t want it due to a falling market or thinks they can get it for next to nothing in a few months when GM turns out the lights.

  • avatar

    Navistar has made a wise decision considering its experience with Ford, and GM’s reputation in business dealings.

  • avatar

    I bet Navistar sees blood in the water and will wait a little while longer – mindset is that GM will get more desperate by the day in order to off load it’s medium truck business for an even cheaper price. Signs are showing that GM is discontinuing leasing, increasing CPO warranties, going back to it’s penultimate employee pricing sale (ultimate sale will be the going out of business everything must go including the cheap suits).

  • avatar

    I’m just waiting for kizmet (karma?) to happen, and for GM and Ford to go Tits Up, then Navistar can return to the light truck industry with Scouts and Pickup Trucks.

    (tongue in cheek, maybe?)

    Actually, to be honest, International truck built some of the best REAL trucks ever.

    Up here in the great which lake strewn north, where we have 7 months of winter and 5 months of bad sledding, one of the absolute toughest jobs for vehicles without exception, is PLOW TRUCK.

    So need I go any further when I say that everywhere you look up here, you see old (newest possible being 1980 model year) International Scouts with plows, still pushing tons of snow every winter?

    Most of them barely have bodies left without rust cancer, but still run. And run. And run.

  • avatar

    BTW given the fact that GM is essentially, BROKE, does this mean its chances of lasting through October (100th anniversary of GM) is slim to none?

    I’d be something resembling irony if the company went chapter 7 the same month as its 100th anniversary, wouldn’t it?

  • avatar

    This would actually be a good private equity buy unless there are too many connections back to GM to make it safe.

  • avatar

    where do medium duty trucks start and end.

  • avatar

    Yo, menno !

    Also, I recall seeing a lot of International gasoline V8s being used as pump engines on farms, right by the road, in Kansas pushing…water to center-pivot irrigators ? Oil to a pipeline ?

    I’m sure they’re maintained, but the point is, they seem to have been left running continuously, unattended, for years, outdoors…

    Also, ‘comments’ seems to have been closed on the Welsh story, but perhaps you remember this bit ?

  • avatar

    Navistar 5 ton trucks, saw one today. What an ugly SOB. So that’s where Lincoln got their new grille design!

  • avatar
    John Horner

    I think Navistar was smart to back away from an entanglement with GM. If Navistar really wants to offer trucks a bit smaller than those in their lineup they can just build the things themselves.

    Also, that part of the US market is going to be getting more competitive as Mahindra and Nissan/Renault enter the fray. Toyota/Hino/Isuzu also have big growth plans in medium duty trucks. All of those players have a global vehicle lineup to draw upon. Once upon a time, GM was a major player in everything on the road (and rails). Heck, the US government forced GM to share passenger bus technology because it had that market cornered. Now, GM has “focused” itself out of huge markets.

    Or, it could simply be a matter of GM’s lineup being dependent upon very shaky parts supplies from the likes of Delphi, Detroit Axle and GM Powertrain!

  • avatar

    While I am not familiar with the quality of GMs current medium duty trucks, it may have been a blessing in disguise for the customers to keep Navistar out of it.

    The Navistar influence is responsible for a lot of the problems with the 6.0 liter Ford diesel.

  • avatar

    Hi Powerglide, yeah, that McDermott is a piece of work, isn’t he? But then, many (most?) of the Washington DC crew are.

    Just remember that everything you say (whether or not you think anyone is listening) can be used against you by ‘them who’s in power’.

    For that matter, everything we type, too.

    That’s okay. One day, these elitists won’t know what to do and will run off and leave the ashes of a civilization to the rest of us. Perhaps we can then pick up where the founding fathers left off and rebuild.

  • avatar

    It’s good for GM that that they backed out.

    Two words:

    International Harvester.

    For those not too familiar with Medium Duty Trucks. They only use names like Rockwell, Borg Warner and Caterpillar, and Cummins and Allison. Not AAM. and Delphi.

  • avatar

    Why pay premium prices when you can wait for the bankrupt sales to come on line – Navistar made a wise decision!

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