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October 9, 2015

Navistar and GM Mediums

During a recent press webinar, Navistar president for trucks and parts Bill Kozek hinted that the medium-duty trucks that Navistar will be supplying to GM may be more than rebadged Internationals from the current lineup.

The announcement in early October 2015 set the seal on negotiations that had commenced well before Kozek came to Navistar to take over the top job, he says. The two companies would benefit with GM being able to offer class 4 and 5 conventional trucks in addition to the rebadged Isuzu models that are also in its line-up from 2016. These will cover class 3 to 5 with low coe models in regular and crew cab configuration.

This, then, sees GM back into medium-duty after withdrawing from the business in 2009, following the bankruptcy bailout by the Obama administration. Back then GM sought to sell this slice of its portfolio to Navistar or Isuzu, but instead shuttered production with the loss of 400 jobs.

Those jobs now shift to Springfield, Ohio, where Navistar will add 300 staff and invest more than $12 million to update and upgrade production of the trucks to be introduced in 2018.

Under the long-term agreement, Navistar will develop the chassis and cab and GM will provide engines and other components. The trucks will be sold by both companies under the Chevrolet and International brands.

There will be diesels in the the new trucks, though from GM rather than from the Navistar MaxxForce line. The class 5 will be predominantly diesel, the smaller class 4 will be gasoline -powered. The new vehicles will be developed co-jointly between Navistar and GM, says Kozek, with each taking the lead in its specific area of expertise.

Navistar will likely gravitate to the heavier models where GM will concentrate on the lighter end, he says. In both cases, the new products will be very much concentrated on vocational markets, construction in particular. And this size truck is widely used in the tow-truck industry where GM likely sees great opportunity.

Introduction of the new models coincides with the next phase of greenhouse gas reduction for commercial vehicles so there is a strong likelihood of a new cab for the conventionals. There likely will not be any low cabover derivatives, given the agreement with Isuzu announced recently. However, Kozek didn’t rule out the possibility if there is sufficient demand down the road.

The agreement replaces the 13-year-old deal Navistar had with Ford that ended early this year. The two companies built trucks in a joint venture under the Blue Diamond banner in Mexico but Ford is taking over production of its F650 and F750. The agreement with GM replaces this business which commentators estimated at $400 million a year. 

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