Navistar Backs Out of GM Deal
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.