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GM will kill medium-duty truck unit after failing to find buyer

GM will kill medium-duty truck unit after failing to find buyer

Jamie LaReau

Automotive News | June 8, 2009 – 12:02 pm EST


General Motors will shut down its medium-duty truck business by July 31 after a four-year search failed to find a buyer.

The operations, which produce the Chevrolet Kodiak and GMC Topkick, were among the first assets GM put up for sale in 2005 after it started losing money. GM and Navistar International Corp. struck a tentative deal in 2007, but the pact expired last summer without the sale being completed.

GM has moved quickly since it filed for bankruptcy last week to disclose plans for brands and operations that aren’t part of its long-term strategy. The automaker plans a quick sale of its profitable assets by the end of August to a new company.

CEO Fritz Henderson told reporters in suburban Detroit today that the truck business had not been successful for years and workers would be deployed to other facilities or offered an attrition program.

GM sold about 20,000 of the vehicles last year, down from roughly 30,000 in 2007, as the U.S. economy sank into a deeper recession.

About 400 hourly and salaried workers are involved in the production of the medium-duty trucks at a GM plant in Flint, Michigan, spokesman Jim Hopson said.

The Flint plant has more than 2,100 employees overall and also builds light pickups. The automaker plans to continue production of the pickups at the plant.

GM had negotiated with multiple potential buyers.

After striking the tentative deal with GM in 2007, Navistar CEO Dan Ustian said: “We’re always looking to grow, and that complements us pretty well.”

But he stressed that any proposal that required the truck and engine maker to retain GM’s plant in Flint would likely be rejected. GM also produced medium-duty trucks in Toluca, Mexico, until June 2008.

GM has lost a total of $88 billion since posting its last annual profit in 2004.

The shutdown of the truck business leaves GM actively searching for a buyer of its Saab brand. Last week, GM reached deals to sell its Hummer and Saturn lines. The automaker has held out slim hope of finding a buyer for Pontiac, scheduled to shut down by the end of next year.

Reuters contributed to this report.


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