With the nation’s steadying economy accelerating demand for all manner of commercial trucks, the truck-production landscape is evolving – and revolving – as former partners and rivals scramble for position in what is projected to be a boom period for truck manufacturing.
Industry sources believe General Motors is close to announcing a new partnership with commercial-truck stalwart Navistar International to manufacture so-called “medium-duty” trucks that cover the industry’s Class 4, 5 and 6 classifications. GM built medium-duty trucks for decades before exiting the business in 2009 amidst its bankruptcy reorganization and the recession.
A spokesperson for GM said the company has made no announcements and had no information to share.
A GM linkup with Navistar would be the second prong in a GM reentry to the medium-truck business: earlier this month, the company announced a new venture with Japan’s Isuzu Motors to sell a version of Isuzu’s N-Series “cab-over” trucks, a special configuration of delivery and service trucks that positions the driver over the engine rather than behind it and also are classified as medium-duty models.
Navistar, meanwhile, has considerable history with GM – and crosstown rival Ford Motor.
Navistar's International-brand DuraStar medium-duty truck. A linkup with Navistar would return GM to... [+]
Navistar and Ford last year severed their Blue Diamond venture that for a decade saw Navistar build medium-duty trucks sold by Ford’s commercial-truck network. As part of an agreement struck with the United Auto Workers union in 2011, Ford this year will begin in-house production of its medium-duty trucks, the 2016 F-650 and F-750, at a plant in the Cleveland suburb of Avon Lake, Ohio. A Wall Street Journal story last year pegged the Ford business as worth $400 million annually to Navistar.
This year, Ford begins in-house production of its all-new line of medium-duty trucks, one reason... [+]
Illinois-based Navistar was a suitor when GM was shopping its money-losing medium-truck business in 2007, but in 2008 backed out of a deal to purchase the unit as the U.S. economy began to slip, pulling commercial-truck sales along for the ride. The recession marked the beginning of a bad stretch for the storied maker of heavy-truck diesel engines and its own International-brand commercial trucks – including the largest Class 7 and Class 8 highway haulers – capped by Navistar’s costly backing of a failed engine design to enable its engines to comply with new federal emissions standards.
As GM neared the end of its in-house production of medium-duty pickups, the company was producing about 22,000 units annually, but then-CEO Fritz Henderson said the business was unprofitable.
After being jettisoned by Ford, Navistar said it would strike out alone with its International brand, but the move comes as the company’s share of the medium-truck segment dipped from 36 percent in 2011 to a current share of about 26 percent.
Navistar said one plan to beat back former partner Ford and other rivals is to offer a wider range of engine and transmission choices in its medium-duty trucks, but a teamup with GM would markedly increase production volumes for the company, while GM would gain immediate access to Navistar’s portfolio and manufacturing capacity, enabling a swift reboot for its abandoned medium-truck presence – just in time to parry Ford’s new in-house truck lineup.
