Navistar-GM truck deal reported close

July 19, 2007
Navistar International Corp. could announce its purchase of General Motor’s medium-duty truck business by the end of the month, according to a report in a local Springfield, IL, newspaper. One of Navistar’s major International truck plants is located in Springfield

Navistar International Corp. could announce its purchase of General Motor’s medium-duty truck business by the end of the month, according to a report in a local Springfield, IL, newspaper. One of Navistar’s major International truck plants is located in Springfield.

According to a story in today’s Springfield News-Sun, Navistar is talking to local United Auto Workers officials about a deal that would shift manufacturing from GM’s medium-duty truck plant in Flint, MI, to the International Springfield facility. It quotes both the local chamber of commerce president and the city’s state representative predicting a “positive announcement” on the long-rumored sale by the end of July.

International Truck and Engine officials had no comment on the story, which they characterized as rumor and speculation. The local UAW official also told the newspaper that he could not comment on the possible sale because of pending negotiations.

The possible sale of the GM medium truck business is seen as part of the company’s restructuring plans, which included an agreement in late June to sell its profitable Allison automatic transmission business (http://fleetowner.com/news/topstory/gm-sells-allison-transmission-carlyle-onex/index.html) to an investment group for $5.6 billion.

"Medium-duty is a small part of (GM’s) overall business and competition is increasing in the medium-duty segment," analyst Chris Brady, president of Commercial Motor Vehicle Consulting, told FleetOwner. "The investment needed to make the [medium-duty] product line competitive will probably increase and they will need all the resources they can get to turn around their automotive business. GM is looking at the competition increasing and [are] asking where do they want to spend their resources— in commercial vehicles or their automotive business. The choice is obvious."

The investment banking concern Bear Stearns has also speculated that Navistar would make the fit for GM’s truck line and says it would view the deal as favorable for Navistar.

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