GM looking to sell off Isuzu truck interest to Mitsubishi
Word 'round the 2006 General Motors Divest-Fest campfire is that the automaker's stake in Isuzu is
likely to be the next to go. GM is reportedly plying its stake in Japanese truck manufacturer Isuzu Motors Ltd. to
Mitsubishi Corp. and Itochu Corp. A spokesman from Mitsu indicates that the proposal has indeed been tendered, and that
the company is apparently regarding it with favor.
GM and Isuzu have had a longstanding relationship dating back to 1971, and the two presently build diesel powerplants both Stateside and in Poland, along with cooperative pickup manufacturing in southern Thailand.
[Source: Bloomberg News]
Reader Comments (Page 1 of 2)
j name 8:08AM (3/30/2006)
If they sell their Duramax portion of the business for heavy duty trucks they are crazy. Not sure what this company is thinking. All kinds of new model introductions which is not cheap then they get rid of their core business. If they sell the Duramax line with this..../..
GM has had some very serious decision making as a consumer. Buick LeSabre, Olds 88. They killed these cars which were getting 30 miles to a gallon and you drove in comfort and safety. All kinds of new product intros and the only exciting one is the Pontiac two-seater. What are they thinking?!
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klaatu 8:09AM (3/30/2006)
You read it here first, didn't I predict this on autoblog a few weeks ago? (Answer: yes).
Next domino for GM to knock over and sell: Daewoo?
GM is truly, deeply in the doo-doo, folks. It should be patently obvious to anyone with eyes and a brain.
If you've got GM stock at this point, you may as well hold on to it on the 50% (and dropping fast) chance that the company will even survive, because selling up now is kind of like saying - "Bloody hell! No worries, mate. This ship is unsinkable! Let's go have a pint!" as you walk along the Titanic as the "tilt" gets worse and worse to the point where you have to hang on to stuff to get around - THEN realizing that the water is coming up fast, so jumping in. May as well hang on for the ride, she might refloat.... miracles happen, right?
Maybe Isuzu USA (light vehicle sales) is barely existant but possibly capable of coming back IF Mitsubishi and Isuzu automotive interests collaborate? The medium (snub-nose diesel truck) division will do fine.
How about reskinning the Mitsubishi Endeavor, pulling it away from Mitsu dealers and giving it to Isuzu? "Nobody" goes to Mitsubishi dealers for big SUVs any more - look at the "on lot times" for the Endeavor (plus, it's ugly - lose the fat fenders).
How about badging the Mitsubishi Dion as an Isuzu for the USA (a small minivan kind of competitive with the Mazda 5). Maybe the Mitsubishi Grandis minivan could be sold as an Isuzu in the US (a variant of the Honda Odyssey used to be sold by Isuzu before GM completely ruined the company). Make the Isuzu brand an "unusual" "niche" brand, gradually move Mitsubishi towards a BMW-like marque (with better value pricing, but not down with mass market makes).
How about using Isuzu light vehicle (USA) dealers to sell COLT cars as a 2nd "youth" brand, including the Colt "i" and the Colt cars themselves could be marketed as the "JDM" line, and in open areas, let Mitsubishi dealers handle them.
Anyone else with any thoughts on what Isuzu could do with Mitsubishi ownership? Or do you think Mitsu will just shut-down the light vehicle USA operations and let Isuzu be to Mitsubishi what Hino is to Toyota? (Hino once built Renault-licensed rear-engine cars AND medium trucks in the 1960's - the company was so weak, Toyota took part interest, now it does medium trucks only).
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Mort 8:10AM (3/30/2006)
Yay! NO ONE CARES MITSU!
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Ibringthetruth 9:03AM (3/30/2006)
Clearly, Klaatu, you don't read much in regards to automotive news.
If you did, you'd realize that GM will never sell Daewoo in this lifetime.
First reason:
GM owns much more Daewoo then they did of Isuzu. They spent a lot of money into the takeover.
The company is not about to throw that huge investment away after only a few years of ownership.
Second reason:
Daewoo is the only part of GM that is really making money worldwide. Thanks to Daewoo, GM has made some serious gains in Europe and Asia and the Engineers from the Korean company are helping design and engineer GM's compact and sub-compact vehicles to sell around the world.
It's only getting rid of it's subsidiaries that have no more use to GM as a whole.
Which is why GM sold it's shares of Fuji Heavy and now this.
Before you post.. do some research. You might actually find real information.
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EquinsuOcha 9:11AM (3/30/2006)
GM only owns a portion of Isuzu though, not the whole thing. It's not a bad deal for Mitsubishi, who as a global entity, is in much better condition than just the US market. Here's the breakdown:
GM owns 12% of Isuzu and the partnership between the two companies is extensive. GM makes Isuzu-based medium-duty trucks for Isuzu at its Flint, MI, plant. GMs purchasing joint venture with Fiat performs some purchasing for Isuzu. The two exchange components, including engines, and share engineering and some sales and distribution activities. Omnibus Transportes SA in Ecuador, 53% owned by GM, assembles GM, Suzuki and Isuzu vehicles. GM owns 57.7% of General Motors Kenya Ltd., which assembles cars and Isuzu commercial vehicles. Joint venture GM Egypt S.A.E. is owned 31% by GM and 20% by Isuzu. Industries Mecaniques Maghrebines in Tunisia is owned 4.8% by GM and 2.4% by Isuzu. GM owns a minority interest in Isuzus diesel engine businesses. Isuzu-General Motors Australia Ltd. is a 60/40 Isuzu/GM joint venture. GM also assembles Isuzu trucks in several overseas countries. GM owns 51% of General Motors Isuzu Commercial Truck LLC.
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DarkKnight67 9:16AM (3/30/2006)
Klatuu is your typical GM Hater. He's not willing to think of circumstances and the effect on his pocketbook in the long run. Of course, he'd also tell us that the lost revenue in this country is worth the death of GM.
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Michael Karesh 9:38AM (3/30/2006)
They restructured their ownership in Isuzu a couple years ago, splitting apart the engine part of the business from the rest. This might just be the sale of remaining ownership in the vehicle part of Isuzu. Anyone able to confirm either way?
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klaatu 9:41AM (3/30/2006)
I most certainly am not your typical GM hater, I'm quite atypical, in fact. After all, I gave GM tons of money for about 25 years and chance after chance after chance to build a decent product, and they failed me every time. So I'm certainly a slow learner, eh? But now, I've caught on, thanks. More typical GM haters don't take NEARLY as long as I did to come to the same conclusion, and probably make up a reasonably good proportion of people (75% and growing) who do NOT buy GM vehicles new....
Hey, GM? That "nice" Cavalier commuter car you sold me new, back in 1997? The one your local dealer refused to repair under your useless warrantee, and the one on which I put non-GM brake rotors before I traded it off because I didn't want to be responsible for someone else's death? Yeah, that one. It was THE LAST STRAW. (I should have known not to bother as it was built in the same Ohio plant that the infamous Vega had been built in, but my bad - how dumb was I? No more).
Anyone else read the other article about UAW vs. Delphi and realize that there is a distinct possibility that GM is literally going to be sunk? Being from Michigan, I am distinctly aware that our state (most especially the southeast) will be down the tubes for about a decade, just as South Bend was after the Christmas 1963 shut-down of Studebaker.
Aren't real-life consequences for bad management and UAW decisions, greed, fudging the books, and burying the competition a real bitch when "commuppance" happens? Just ask the ghost of Preston Tucker as he is busy laughing himself silly.
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S1500 9:57AM (3/30/2006)
I was disappointed when Isuzu proudly discontinued their car line in favor of their overprieced, oversized Trooper SUV line. And look how invisible they are now on the market. The Axiom was just ugly. The I-Mark I had, while it didn't last long, had a nice peppy engine, and that was sans turbo.
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klaatu 10:00AM (3/30/2006)
"Clearly, Klaatu, you don't read much in regards to automotive news.
If you did, you'd realize that GM will never sell Daewoo in this lifetime.
First reason:
GM owns much more Daewoo then they did of Isuzu. They spent a lot of money into the takeover.
The company is not about to throw that huge investment away after only a few years of ownership.
Second reason:
Daewoo is the only part of GM that is really making money worldwide. Thanks to Daewoo, GM has made some serious gains in Europe and Asia and the Engineers from the Korean company are helping design and engineer GM's compact and sub-compact vehicles to sell around the world.
It's only getting rid of it's subsidiaries that have no more use to GM as a whole.
Which is why GM sold it's shares of Fuji Heavy and now this.
Before you post.. do some research. You might actually find real information.
Posted at 9:03AM on Mar 30th 2006 by Ibringthetruth"
Ibringthetruth? What part of GMAC making money (in fact being the only profitable North American operation) and being partially sold off by GM didn't you get? Or hasn't it happened yet? I can scarcely keep track of all of these lifeboats leaving the "GM Titanic".
What part of rumors of GMHolden being sold off, since it is profitable, didn't you hear about, or didn't someone send you that memo?
As for Saab, well, nobody but GM was dumb enough to buy that so it likely wouldn't sell, as it has consistently lost money. Likewise, Saturn, which has now been completely folded into GMNA. (GM North America).
As I've said. If and WHEN we see GM selling off Daewoo, we'll know that's the death rattle, because it IS so important to GM globally, and so profitable. Ironic, no? The one "good" buy that GM makes and it's a company everyone else had given up on.
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Koba 10:22AM (3/30/2006)
No matter who GM sells it's stake in Isuzu to, within 18 months Isuzu will probably buy it from whoever. Isuzu is a highly profitable company that has had it's image held down in the US for years by GM. Anyone remember the Storm, yeah the Isuzu that outsold all the Beretta+companions. GM used big money to hold them (Isuzu) back, and now that the tables have turned, I think we should look to see great things coming from one of the only profittable affiliates of GM. Hopefully one thing will be a diesel pickup, and it should be class leading, since Isuzu afterall is the world leader in diesel engines (eat that MB!).
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MikeW 10:27AM (3/30/2006)
Maybe Mitsubishi will make a better pickup than the Dodge dakota clone.
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Koba 10:39AM (3/30/2006)
And anyways, GM's stake is only 7.9% of Isuzu. If anyone buys anyone else, it would probably be Isuzu buying Mitsubishi's NA auto operations. This would alleviate the problem with importing a diesel pickup from Thailand.
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mikesright 12:00PM (3/30/2006)
Holden and GM Daewoo won't get sold. They are crucial to GM's survival in the global marketplace and are too fully integrated into GM's strategies. Izuzu, Suzuki, and Fuji Heavy were all operations that were not key to GM's survival and not as integrated. Also, GM was able to sell the stock of these companies and be able to continue the relationship with these companies or walk away as they choose, because these companies rely more on GM than GM does on them (or in the case of Fuji Heavy, nobody was relying on anybody, made no sense to continue the relationship). An any case, looks like GM is preparing for battle.
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mikesright 12:01PM (3/30/2006)
Holden and GM Daewoo won't get sold. They are crucial to GM's survival in the global marketplace and are too fully integrated into GM's strategies. Izuzu, Suzuki, and Fuji Heavy were all operations that were not key to GM's survival and not as integrated. Also, GM was able to sell the stock of these companies and be able to continue the relationship with these companies or walk away as they choose, because these companies rely more on GM than GM does on them (or in the case of Fuji Heavy, nobody was relying on anybody, made no sense to continue the relationship). An any case, looks like GM is preparing for battle.
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klaatu 12:50PM (3/30/2006)
..."An any case, looks like GM is preparing for battle.
Posted at 12:00PM on Mar 30th 2006 by mikesright"
May be the shortest "battle" scene ever, if (or when) the UAW strike Delphi, mikesright.
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lalaland 1:03PM (3/30/2006)
"Daewoo is the only part of GM that is really making money worldwide."
Ummm, Fuji Heavy and Suzuki were both making a global profit when GM sold off its shares.
Maybe you should do some research yourself, IBringTheTruth.
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jamie 1:05PM (3/30/2006)
Flat out...GM has to sell out everything that ain't nailed down and now!
Delphi is definitely filing to void the union contracts tomorrow morning...case closed.
http://biz.yahoo.com/ap/060330/delphi_unions.html?.v=3
We all know what that means. STRIKE! But the judge has until May 8th to make his decision.
So much for all the hard work to come to a preliminary agreement only to flush it down the toilet.
Now GM must generate enough cash to sustain itself for as long as possible. They will likely burn through a billion dollars a week during the strike.
I know their deal with Toyota (NUMMI) isn't up for a year or so, but I wouldn't doubt that it is on the block too.
Should have shed these roadblocks long ago.
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Richard Warren 4:24PM (3/30/2006)
Let them strike, let the judge rule, let the contract be terminated.
GM buys Delphi back for pennies on the dollar, re-open as just that GM division. Just like old times.
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Richard Warren 4:31PM (3/30/2006)
Sorry about 18, got posted to the wrong blog.
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