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GM looking to sell medium-duty business

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JAMES P. LEUTE
December 21, 2007
— General Motors said Thursday it plans to sell its medium-duty truck business and close the book on a product line that includes a significant chapter on the automakerís assembly plant in Janesville.

When the sale is complete in late 2008 or early 2009, the Warrenville, Ill.-based Navistar International plans to add the Chevrolet Kodiak and GMC TopKick brands to its portfolio of trucks, tractors, buses, chassis and engines.


Production will switch from a GM plant in Flint, Mich., to an unnamed Navistar facility, and GM will retain ownership of its Flint plant for other products.


Medium-duty production started at the Janesville plant in 1989 on a retooled line that once built pickup trucks.


In early 1997, GM announced a $500 million plan to consolidate medium-duty production in Flint. The move was expected to affect about 1,200 Janesville employees building the medium-duty trucks that were used for everything from dump trucks to beer haulers.


Good news came with the bad, as GM announced that the Janesville plant would build a new generation of Chevrolet Suburbans and Tahoes and GMC Yukon XLs and Yukons.


The good news was tempered by the announcement that the Janesville plant would see dramatic cuts to its employee base of 5,600 hourly and salaried workers. Beyond the 1,200 jobs expected to be lost with the medium-duty line, GM said it would cut the work force by as much as 25 percent to about 3,300. The plant, which still builds the full-size sport utility vehicles, now has about 2,500 hourly and 200 salaried employees.


While it took a little longer than planned to get the Flint plant ready for the medium-duty consolidation, Janesvilleís last medium-duty truck rolled off the line in June 2002, displacing about 800 workers who had built more than 416,000 of the trucks over the 13-year run.


When the medium-duty line left Janesville, it freed up 1.2 million square feet of space. Today, some of the plantís light-duty operation has moved into that space, but plant officials hope to use more of it for in-sourcing work agreed to in the national contract between GM and the United Auto Workers.


Troy Clarke, president of GM North America, said the decision to sell the medium-duty truck business is another step to shed assets and focus on GMís core business of selling cars and light-duty trucks. In the last year, GM sold controlling stakes in its finance arm, the General Motors Acceptance Corporation and its Allison Transmission unit.


Last year, GMís medium-duty unit built 59,000 trucks for a 12-percent share of the market.


The automaker recently announced plans to suspend medium-duty production for five weeks because of slow sales. The shutdown will put about 500 workers in Flint on layoff.



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