GM-Navistar truck pact expires without final deal

[Stéphane Dumas]

Originally Posted by bone

I,for one, am pleased that the deal fell through. The Topkick and Kodiak are great looking and performing vehicles that give GM exposure in the medium-duty market. I just wish that GM hadn't dropped their heavy-duty line which was a top performer until the middle eighties when GM lost interest. The 1967 to 1974 GMC MH 9500,IMO,is the best looking heavy-duty truck ever put on the road.

http://www.hankstruckpictures.com/pi...3_20070606.jpg

Me too, and I could add Ford to the mix if they hadn't sell their former L-series heavy-duty trucks (I still saw a couple of them on the roads here) who morped into Sterling, a division of Freightliner, and their current medium-duty truck joint-venture called "Blue diamond" with Navistar might be on its last kilometers.

Then there a even more rarer heavy-duty truck, the Dodge BigHorn http://www.olddodges.com/

[SierraGS]

Originally Posted by nadepalma

This is certainly news from a stategic perspective and may presents an opportunity for GM to eliminate an existing retail brand.

Many on GMI have said that GM has WAY too many brands and that some may need to be cut. GMC, in particular, is a bit of a redundant retail brand.

Keeping their medium duty truck operations in house, GM could almost kill two birds with one stone. GM could possibly stop selling GMC as a true retail, mass-market product - and simply use GMC as a professional, commerical grade operation.

That means, GM could stop selling Chevy variants of the Kodiak, etc - and merely rebadge all their bigger stuff as GMCs. It would also mean GMC would no longer sell rebadged stuff for the masses and focus only on the industrial market.

This would allow GM to "cut an extra division" without cutting it altogether and retaining the GMC name for what it claims to alredy be - "Professional Grade"

It would also allow GM to continue to consolidate and shift their brand strategy. We've already read rumors that Saturn showrooms may be consolidated with BPG showrooms. Some would say that FOUR BRANDS under one sales channel is a bit much and would present some overlap and image problems.

But if GMC will moved in a new direction - and the total number of locations selling GMC were reduced - then GM could end up ahead of the game and shift their retail strategy.

Just my two cents, but I think it makes sense.

GM has too many car brands and needs a truck brand (GMC) for the mid-level sales channel.


Back on topic - Chevrolet/GMC have a good Class 4, 5 and 6 business with GMC doing well in Class 7.

GM should approach PACCAR (Kenworth/Peterbuilt) about a joint venture (or other option) - Funny how one of the most respected large truck makers ALSO has TWO (successful) truck lines - might actually be something to that strategy.

Kenworth does well in Class 8 as does Peterbuilt and about the same as GMC in Class 7 (GMC is ahead of Kenworth - YTD).

Joining Chevrolet/GMC class 4-6 sales with PACCAR class 7 and 8 sales make for a stronger overall truck maker and one that can take advantage of what I think will be a boost in class 4-6 trucks with a move towards more rail freight.

This combination also allows PACCAR to sell Chevrolet and GMC class 1, 2 and 3 pickups (mainly class 3) alongside its larger class 4 through 8 ones. There is a market for this as fleet managers buy pickups for shop and administrative personnel.

This would be a win-win for a JV and/or create a stronger mid to heavy truck maker for PACCAR and higher pickup sales for GM.

[RB35SLT]

I'm not completely sure about this, but...

When did Chevrolet start making trucks?

[doh]

Does it seem like anything GM has to offer, nobody wants?

They should be looking towards Isuzu, who builds GM's cab forwards, but does not have a Conventional cab in North America.

[MisterMe]

Originally Posted by rsbaker

... GM used to make Heavy Duty as well as medium duty trucks. Why is it that Peterbuilt, Freightliner, Mack, and Volvo and Izuzu can make money on trucks and GM Can't. ...

I see you know nothing about the heavy truck market. With the exception of Mack, heavy truck manufacturers are system integrators. They are not manufacturers in the same sense a passenger car manufacturers. The only thing that is inherently unique between a big rig from Volvo and one from Kenworth are the cab shell and steering gear. All other components are interchangeable. Virtually any two big-rigs can be outfitted virtually identically--from the engine to the rear axle; from the tires through the furnishings in the sleeper cab to the spoiler on the roof. All accessories are available from virtually every big-rig manufacturer.

Profit is the result of some advantage in the market. With nothing to differentiate them, big rig manufacturers have no advantages over each other. For this reason, Dodge dropped out of the market decades ago. GM sold out of Volvo about 20 years ago. Ford sold out to Daimler-Benz a few years later.

The search for profit has resulted in a lot of industry consolidation. As part of general industry consolidation, you see the Europeans like Volvo and Daimler-Benz buying-up North American brands. You also see that companies that concentrate on the market for big rigs divest other interests. A notable example was International Harvester. It sold its name and farm implement business to Tenneco. International Harvester now concentrates on medium-duty trucks and big rigs under its new name, Navistar.

[Stéphane Dumas]

there was some rumors then IVECO (Fiat is the main shareholder and also owns Case-IH, New Holland via its subsdiary CNH Global) who eyes Navistar might play a role?

[MisterMe]

Originally Posted by Stéphane Dumas

there was some rumors then IVECO (Fiat is the main shareholder and also owns Case-IH, New Holland via its subsdiary CNH Global) who eyes Navistar might play a role?

And to think, I was still assimilating Ford's purchase of New Holland. To learn that International Harvester, Case, Ford, New Holland, and Steyr are all now one is a bit daunting. It's amazing what you miss when you miss a memo.

[Stéphane Dumas]

I taught of a one idea than might remain as a pipe-dream unless a miracle happen. Imagine if Cerberus via Chrysler do an agreement with GM to chaperone the manufacturing of the Kodiak/TopKick and allowing Dodge to get its own version, using the GM chassis but having the Hemi, Phoenix and/or Cummins engines (as well as a different cab body) to differenciate it from the offering of GM. It's could be a win-win giving Dodge a entry on the medium-duty truck market (who was absent for 30 years and strangely they keep their medium-duty truck in Mexico until the late 1990s) and letting the GM Flint plant open for a while

[nadepalma]

Originally Posted by SierraGS

GM has too many car brands and needs a truck brand (GMC) for the mid-level sales channel.

Perhaps, but who says that any car maker needs a truck specific retail brand?

The only truck/SUV specific brands in the market are Land Rover, Jeep, Hummer, and Isuzu.

Hummer will either be shut down or sold off and Isuzu is pulling out of the US market (though they did sell cars in other markets). And chances are that since Toyota took a stake in the company, it's very possible that Isuzu may be relegated to just medium duty trucks and diesel engines while their passenger car program may eventually abandon the truck/suv-centric approach and start selling a large number of rebadged Toyota/Dihatsu based products.

Out of those left over, Land Rover is suffering from a slacking of sales. A recent articl, Tata cuts Land Rover production, seems to indicate that things aren't rosey for the historic brand. And while I dont know how Jeep is doing, I can only assume that the only products selling well for them are either the Compass or Patriot in light of gasoline prices.

But who's to say that GM absolutely needs a Truck/SUV specific brand - especially in light of current market conditions. Couldn't some of GMC's viable products be sold under other brands? Couldn't we see the forthcoming Terrain be sold as a Buick perhaps? The Acadia is already being sold as the Enclave. All their other products are sold through Chevrolet. Isn't this enough?

I dont want to beat the horse, but the problem with a truck/suv only division is that it dominates the division's image. Chevrolet doesn't have this problem. And neither does Cadillac with it's Escalade variants. The image is still one of a mixed group of products. True BPG can rely on Pontiac and Buick - but for how much longer can they soldier on without an infusion of product and marketing? Where will it come from when GM has limited resources?

Something has to give...

Just my two cents...