GM Ships Van Production to Navistar In Order to Build More Trucks

To keep up with demand for its midsize pickups, General Motors signed a deal to have Navistar International Corp. take on the task of assembling its commercial vans.

The agreement, released yesterday, will see Navistar assemble the Chevrolet Express and GMC Savana in a Springfield, Ohio plant starting early next year. Booting the vans out of GM’s Wentzville, Missouri plant frees up capacity to build more Chevy Colorado and GMC Canyon pickups.

According to the Wall Street Journal, GM first approached AM General LLC to handle its van production, but those talks went nowhere.

With more room in Wentzville, GM will be able to tailor production to demand and (it hopes) regain lost market share. The automaker’s share of the light truck market dropped 2.3 percent this year compared to the same period in 2015. Last month that saw sales in all GM divisions slide sharply.

To produce the vans, Navistar plans to hire about 300 new employees and re-start an assembly line that sat idle at the Springfield plant for some time. GM already tapped the truck manufacturer to produce medium-duty commercial trucks starting in 2018.

The van contract is good news for Navistar, which just reported its first quarterly profit in four years. The company’s fortunes slipped due to lower demand for Class 8 commercial vehicles.

After re-entering the market in the fall of 2014, U.S. sales of GM’s Canyon/Colorado twins hit 114,505 units last year.