In The News

The General looks East for MD buyout

DETROIT -- According to Japanese and Detroit-based sources, General Motors has approached Japan-based Isuzu Motors about buying The Generals’ medium-duty truck operations.

Media reports suggest the two companies might soon start formal negotiations, and a basic agreement could come as early as the end of the year.

Meanwhile an Isuzu spokeswoman has denied reports that GM has approached the company with a deal but she added “we will begin studying it once we receive it.”

Isuzu is the second-largest player in the Japanese truck industry, manufacturing about 270,000 units annually. Its core business is small trucks -- only 20 percent are medium-duty.

Isuzu’s overseas business is concentrated in Southeast Asia.

Acquiring part of GM would enable Isuzu to sharply increase its medium-duty truck business and enlarge its reach in North America, where it currently has a modest share of the U.S. and Canadian class 6 and 7 markets.

About a year and a half ago, the company opened up shop in Canada under the banner Isuzu Commercial Trucks of Canada Inc.

This announcement comes on the heals of Navistar backing out of a tentative agreement to buy GM’s medium-duty operations

Currently, GMC-W series trucks sold in Canada and the U.S. are rebranded Isuzus.

With a GM deal, Isuzu’s medium and large-truck production would increase by 60 percent to 110,000 units annually and the firm would overtake Hino Motors Ltd. as Japan’s leading truck manufacturer.

GM has been attempting to drive away from the medium-duty business for months. Recently, a tentative deal to sell the business to Navistar International Corp. fell through.

Reportedly, the deal died due to GM's inability to guarantee the union a replacement line at the Flint plant where the trucks are currently produced.