Rumor: GM sale of MD truck line to Navistar off

[DonRobbie]

Dealer's Edge Forum: RIM strikes again

i just attended a meeting and was told the navistar deal is dead, i can not get any one at GM to say its true but have you noticed if navistar was suppose to take over would we have not heard anything by now from them regarding parts and sales, i see nothing or hear nothing from them .

I wonder if Navistar rethought the deal after they lashed up with Caterpillar?

[Joe in T.O.]

I wonder if GM will move to the pickup style medium duty (4500 and 5500) like Ford and Chrysler?

[nadepalma]

I look at this another way. In light of the rumors of GM "killing another division", what if GM killed the Navistar deal in order to hold onto the medium/heavy duty segment in order to have an "outlet" for GMC?

Consider that LaNeve has stated time and again that outside of Hummer, no other divisions will be cut. But is he being truthful? GM may have learned from the fiasco surrounding Hummer - All GM did when they announced it was under review was harm Hummer's image and piss off dealers. Could LaNeve be putting on a front solely to avert attention from further divisional cuts?

CAFE standards and high gas prices are sinking SUV/Truck sales; slowly erroding GM's marketshare and hurting CAFE standings. As those sales sink, GMC (as an all SUV/truck brand) will see its sales slide further and further. This shift could spell huge problems for BPG stores that survived on GMC sales. Clearly it will become less of the "anchor" at BPG stores as GM had imagined (the initial idea being that GMC would be a core brand, and Buick and Pontiac would evetually become satellite brands with no more than 4 products a piece).

Those dealers will now be clamouring for GM to give Pontiac and Buick more products as GMC's volume falls. Already we've seen that Buick is slated to possibly get more products than originally thought (the Skylark/Excelle, a luxury coupe or convertible, and a smaller-than-Enclave SUV are all possibilities) and Pontiac will follow (a new version of the G5 based on DeltaII is almost certain, a "G3" based Aveo is coming, and the very fact that a 2nd generation of the Vibe is here means Pontiac's focus will be more mainstream than sporty cars as Lutz had intended before CAFE standards set in).

So what of GMC? What if GM were to eliminate GMC as a "divisional" brand and just refocus them on MD/HD/Commerical products? If that were the case, then no division would be cut (as LaNeve has pointed out) and GM would further consolidate its mainstream retail pickup/truck/SUV line to Chevrolet -- which will allow them to save millions in advertising, design, etc.

Could this be a possibility? Would GMC truly become "Professional Grade" and limit itself to heavier, commercial products?

In light of the Navistar deal falling through, I think it's a plausible strategy.

[nadepalma]

Originally Posted by DonRobbie

I wonder if Navistar rethought the deal after they lashed up with Caterpillar?

What is the deal with Caterpillar entail?

[mbukukanyau]

The only way around this Truck problem is for GM to make GMC a fully fledged truck division, like Freightliner and go aquirre someone like MAN and perhaps Scania to tie with them, as a indepent business unit, who would also work on diesels.

[mbukukanyau]

Originally Posted by mbukukanyau

The only way around this Truck problem is for GM to make GMC a fully fledged truck division, like Freightliner and go aquirre someone like MAN and perhaps Scania to tie with them, as a indepent business unit, who would also work on diesels.

while they are at it, they could throw hummer there, sell off 51% to some hedge fund and keep the rest with an option to buy back when congress comes out of its cafe drunkeness or when technology makes cafe irrelevant

[Robert Ryan]

The only way around this Truck problem is for GM to make GMC a fully fledged truck division, like Freightliner and go aquirre someone like MAN and perhaps Scania to tie with them, as a indepent business unit, who would also work on diesels.

Ummm one slight problem VW virtually owns Scania and has a 40% interest in MAN. it would be simpler to sell GM to VW, so they can expand their operations in the US.

[C/K Man]

As far as the Navistar/Cat deal prempting the Navistar/GM deal, I doubt it. Cat is getting out of the domestic highway truck engine business. The Cat deal with Navistar involves selling Cat branded International off road trucks in markets outside North America. The Navistar/GM deal was supposed to be Navistar taking the GMC and Chevy medium/heavy commercial lines. Navistar would manufacture and distribute the trucks to GM dealers. As you can see, the deals do not overlap. I was told that the Navistar/GM deal was supposed to be finalized this month, but no official announcement has been made. Some of my International friends are saying there is a rumor the deal is off, but they didn't have any specifics either.

[C/K Man]

Just heard another rumor on this: Seems Caterpillar's decision to drop highway engines, not Navistar's deal to make off road trucks with Caterpillar might be figuring into the GM/Navistar deal. Remember that the 6500/7500/8500 Topkick and Kodiak use either Caterpillar C7 or Isuzu 6H diesels. If the C7 is not longer available, either Isuzu has to still supply the 6H or International will have to stick their own engines in the trucks (the 4500/5500 will not be effected as the Duramax comes from a GM plant). Thing is International dealers are dead set against anyone else using Navistar 6 cylinder diesels. Before Navistar came into the picture, GM was supposedly talking to Isuzu about taking the Topkick and Kodiak, but the talks went nowhere........

[nadepalma]

Originally Posted by C/K Man

As far as the Navistar/Cat deal prempting the Navistar/GM deal, I doubt it. Cat is getting out of the domestic highway truck engine business. The Cat deal with Navistar involves selling Cat branded International off road trucks in markets outside North America. The Navistar/GM deal was supposed to be Navistar taking the GMC and Chevy medium/heavy commercial lines. Navistar would manufacture and distribute the trucks to GM dealers. As you can see, the deals do not overlap. I was told that the Navistar/GM deal was supposed to be finalized this month, but no official announcement has been made. Some of my International friends are saying there is a rumor the deal is off, but they didn't have any specifics either.

Any particular reason why it would be off then if the two deals don't overlap? Very curious...

[C/K Man]

Still no news. The only reasons I can think of that would cause the deal not to go through would be either GM and Navistar can't come to terms, or there is a problem finding an engine to replace the Caterpillar (assuming they will eventually loose the Isuzu). Should hear something by the end of the month.

[Robert Ryan]

I wonder if GM will move to the pickup style medium duty (4500 and 5500) like Ford and Chrysler?

That would be a very light "Medium" commercial vehicle. The C8000, Isuzu based Medium is at least the real deal, they need to keep something like that for fairly heavy work. The F750 from Ford is their heaviest and basically a Light Medium Truck. The Dodge is slightly more than a a HD Pickup.

[doh]

Originally Posted by C/K Man

Still no news. The only reasons I can think of that would cause the deal not to go through would be either GM and Navistar can't come to terms, or there is a problem finding an engine to replace the Caterpillar (assuming they will eventually loose the Isuzu). Should hear something by the end of the month.

Why not use thier own Diesels? They would even be able to use the 6.4L Power Stroke in the 4500/5500 line, after Ford doesn't renew thier Contact after 2009

[C/K Man]

Originally Posted by doh

Why not use thier own Diesels? They would even be able to use the 6.4L Power Stroke in the 4500/5500 line, after Ford doesn't renew thier Contact after 2009

The 6.4L is not durable enough for a truck like the Topkick and Kodiak 6500/7500/8500. What is needed is an engine like the Isuzu 7.8L, Caterpillar C-7, Cummins ISC, navistar DT-466 (now called the Maxforce).

[doh]

Originally Posted by C/K Man

The 6.4L is not durable enough for a truck like the Topkick and Kodiak 6500/7500/8500. What is needed is an engine like the Isuzu 7.8L, Caterpillar C-7, Cummins ISC, navistar DT-466 (now called the Maxforce).

My Bad, it was my understanding that 4500/5500 series was on the block aswell. It could work though on lower power, they did put the Vortec 8.1L in them and Ford used the 6.0L in F 650/750s.

My basic point though is Navistar has thier own line of engines, Maxx Force DT,9 and 10.