Thursday, 1 October 2015

GM and Navistar in new truck deal

Perhaps it was only expected that after falling out with an old girlfriend, i.e., Ford Motor Company, Navistar had to choose the only other girl on the US shelf, namely, General Motors.
In a tersely worded statement, General Motors and Navistar proclaim they have reached a long-term agreement to develop and assemble future medium-duty, conventional cab Class 4/5 commercial vehicles.

After its Blue Diamond venture with Ford Motor Company came to an end in June 2014, this new deal will “allow Navistar to strengthen its product line-up and GM to expand its Chevrolet commercial truck portfolio”.

“Bringing medium-duty conventional cab trucks back into the portfolio strengthens Chevrolet’s commitment to providing commercial customers with more choices and one-stop shopping for a versatile line-up of trucks, vans and crossovers,” declared Ed Peper, US vice president of GM fleet and commercial sales.

The future trucks will be jointly developed “using Navistar’s expertise in rolling chassis configurations and manufacturing capabilities”, and GM’s commercial components and engines.

The vehicles are slated for production in 2018 and will be manufactured at Navistar’s facility in Springfield, Ohio. Will the "new" Navistar vehicles effectively be GM vehicles that have been rebadged "International"?

According to Navistar, it plans to add 300 jobs and invest more than $12 million in facility upgrades and state-of-the-art equipment to produce the new vehicles.

“Our collaboration with GM is another example of our customer-centric, open integration approach – providing our customers with the best technologies available,” said Bill Kozek, president, truck and parts, Navistar. “By working with an industry-leading partner like GM, we’ll be able to enhance our medium-duty product portfolio and leverage our scale and expertise in manufacturing medium-duty trucks.”

Specific terms of the agreement were not disclosed. Additional product information will be announced later, the two companies have promised.

Interestingly, the new deal will save Navistar money – it will have no need to develop engines for these vehicles, no add volume to its existing engine manufacturing facilities.

In addition to its own engines, and those of Cummins, Navistar’s dealerships will have to add stocks of engines spares for a third brand – General Motors.

Ford executives will be smiling quietly to themselves; and Navistar's chief exec., Troy Clarke, will be breathing a gentle sign of relief, hoping for increased sales, but without too much on-cost in terms of new machining and assembly lines, from his new deal. And will the Blue Diamond be closed? Is the closure of Blue Diamond on Clarke's list of "jobs to do".

1 comment:

Alan Bunting said...

This deal between Navistar and GM might be seen by Cummins as an opportunity to get its foot in the door at GM, with Navistar as an intermediary. Cummins now has diesels in the class 4/5 truck size and performance category which match existing GM units but are more modern and, as such, almost certainly more fuel efficient within the restraints imposed by emissions legislation.