GM near pact to sell truck unit to Navistar: report
By Our Corporate Bureau | 20 Dec 2007
Mumbai: General Motors Corp., the world's largest automaker, may soon announce the sale of its medium-duty truck unit to Navistar International Corporation, reports quoting sources close to the developments said.
GM proposes to sell the Flint, Michigan-based business to focus on making a profit from cars and light trucks. The sale is expected to fetch GM around $500 million, according to analysts.
Navistar, the fourth-biggest truckmaker, had been pursuing the acquisition plan, along with buy-out firm Bear Stearns Co., since October.
GM has sold assets worth $21 billion in the past three years to pay operating costs as it posted net losses of $50 billion, including a $39 billion charge last quarter for tax accounting changes.
In August, GM sold Allison Transmission to buyout firms Carlyle Group and Onex Corporation for $5.6 billion. GM's asset sales also included 51 per cent of its finance unit to a group led by Cerberus Capital Management LP, raising $13 billion over three years, and its stakes in Suzuki Motor Corp., Isuzu Motors Ltd. and Fuji Heavy Industries Ltd., raising $3 billion.
Navistar said in October that if it reached agreement on the GM unit, Navistar would sell Chevrolet and GMC medium-duty trucks through the automaker's dealer network in the US and Canada.
GM's medium-duty truck unit built around 40,800 Chevrolet Kodiak, GMC TopKick and Isuzu T-Series models, for uses such as dump trucks and delivery vehicles. It made 59,000 medium-duty trucks in 2006, about 12 per cent of the market.
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