GM Agrees to Sell Midrange Trucks to International

Tom Berg | September 28, 2010

General Motors has tentatively agreed to sell its medium-duty truck business to International Truck and Engine under a "non-binding memorandum of understanding" announced in December by the two companies. Though many details must be worked out, the agreement should be completed by year's end and perhaps sooner, but GM's medium-duty truck dealers will keep their franchises and customers will hardly notice any changes, executives said.

Current Chevrolet Kodiak and GMC TopKick 4500 through 8500 conventionals will continue in production using GM and Isuzu engines and other familiar components, though at International facilities instead of GM's plant in Flint, Mich., where they're now assembled. T-series low-cab-forward midrange trucks probably also will be retained. Future changes to the trucks would be done after consulting with GM, said Dave Tarrant, managing director of Navistar International's Commercial Truck and Powertrain Group.

International will run the GM truck operation through a separate structure, and GM and International dealers will continue to compete for business, Tarrant said. The deal with GM will not affect any of International's current activities, including its engine supply contract with Ford and the Blue Diamond joint venture under which International builds Ford's F-550, F-650 and F-750 trucks plus Ford and International Class 3 and 4 LCF trucks.

GM's plant in Flint would continue assembling Silverado and Sierra heavy pickups, which are not part of the deal, and might get an additional product line to fill the void left by the departing midrange trucks. GM's medium-duty engineering and marketing people will probably be moved to other jobs within the corporation, Gaydash said. The deal will not affect GM's agreement with Isuzu regarding lighter-duty LCF trucks assembled at Janesville, Wis.

International has the capacity to build the midrange trucks and "we have prospective locations in mind," said Dave Tarrant, managing director of Navistar International's Commercial Truck and Power-train Group. He would not say where they are, but a United Auto Workers official in Springfield, Ohio, said management has promised that the GM product line would be moved there. Outside observers think it's just as likely that International would build the trucks in Mexico, where the Ford mediums are made.

The move would mark the end of General Motors' strong involvement in large commercial trucks, which dates to the early 1900s.