GM-Navistar truck pact expires without final deal

[DainBramaged]

Navistar International Corp. said on Wednesday that a tentative agreement struck late last year to buy General Motors' medium-duty truck business has expired without a deal being reached.

Citing what it characterized as the "significant marketplace and economic changes" since the memorandum of understanding was signed in December, Navistar said the companies had decided not to renew the tentative agreement.

It said that while GM was continuing to review strategic options for the medium-duty truck business, a process that it said included continued discussions with Navistar, the Detroit automaker would continue to run the business as it has in the past, including providing sales, service and marketing support to GM dealers.

The breakdown comes as GM is struggling to restructure its operations by slashing production of slow-selling trucks, cutting billions of dollars in costs and boosting production of more fuel-efficient vehicles -- a turnabout that requires the cooperation of its major union, the United Auto Workers.

Navistar planned to move production away from the Flint, Mich., plant where hundreds of UAW workers currently assemble GM's medium-duty trucks.

The Flint Journal newspaper, quoting UAW Region 1-C Director Duane Zuckschwerdt, said the sale collapsed because GM was unable to keep a commitment it made to the union to bring replacement work to the truck plant once Navistar moved production out.

GM had reportedly planned to move production of a super-heavy-duty pickup to the Flint plant.


http://www.autonews.com/article/20080820/ANA02/113628/1128