Report says Isuzu wants out of GM engine venture

Report says Isuzu wants out of GM engine venture

In an interview with Bloomberg News, Isuzu Motors president Susumu Hosoi said the company is exploring options that may include pulling out of its joint venture with General Motors to produce the Duramax diesel engine.

chevy-silverado-xfea.jpgThe venture, DMAX Ltd., builds the engines at the Morraine, Ohio, plant. GM owns 60% of the venture with Isuzu holding the rest. The popular Duramax engine powers GM’s Silverados. It also was the powerplant of choice in GM’s medium-duty truck line, which the company shuttered this year when it couldn’t find a buyer.

A GM spokesperson told Bloomberg “there are no plans to change the relationship with Isuzu in regard to the DMAX plant.”

Hosoi, though, may see differently. “Our venture in North America serves large-size vehicles, and there is definitely a question mark on that market,” he told Bloomberg. “I want to ask GM what their thinking is.”

Silverado sales have dropped 34% this year and without a medium-duty line needing engines, Isuzu may not see value in continuing the venture.

This hiccup is just the latest in the long history between Isuzu and GM. The companies first joined forces in the early 1970s when GM invested in Isuzu. In 2000, the companies formed the General Motors Isuzu Commercial Truck LLC to merge medium-duty sales, service and marketing functions. That venture formally ended in 2007.

At one point, though, GM owned 37.5% of Isuzu. Earlier this year, as GM was reportedly shopping its medium-duty business, Isuzu was a rumored buyer. At the time, Hosoi said. “If working further with GM can give us that incremental [sales] volume, then we will consider a new form of alliance with them.”

A deal, though, never came together for various reasons. Eventually, GM shut down its medium-duty business this past summer.