• Mar 30, 2006

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]



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  • 27 Comments
      • 8 Years Ago
      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.
      • 8 Years Ago
      To the "other" jeff, to answer some of your questions will be simple, some others more complicated.

      First, I have a "vested" interest in both companies having served them both since we were under the reign of the 41st President. I can comment only on things I believe to be misconstruded and to guide that person back on the track of truth(I hope that doesn't sound to kookie). To divulge in details that would be considered future strategy, would violate certain aspects of my position, which would not be good for my employment status.

      That being said, I am not sure why you would think that Isuzu has not been able to advertise since 1985. Do you mean literally or figuratively? Isuzu has obviously not has the ad budget that they used to have, but they also have not had the sales to finance a growing budget. If you remember in 2001 (you might since I see you in several auto blogs) that John Devine (GM CFO at that time) made the remark that Isuzu needs to exit the SUV business and concentrate on CV business. That remark was followed up the next day with a retraction by John. Isuzu soon released a half effort at an SUV called the Axiom, which was a huge failure for several reasons. The outside styling and idea was ahead of its time (idea:crossover between SUV and wagon, styling:now the Vue, Tribeca, Torrent etc., all look like spinoffs), but the execution of its interior design, and handling characteristics were flawed. That is a whole nother blog. This is an example of Isuzu still acting separate from the "parent". But misteps in follow up product could fuel your comment about the "contract" (I have never seen one) with GM and Isuzu regarding ad budgets and releasing new product that might compete with current GM models. My opinion is that Isuzu's current SUV situation is due to a token leader position as head of SUV in the U.S., and Isuzu's failure to allow certain key decisions to be made by U.S. staff who can interpret the market better than trying to from Japan. Until Isuzu allows this to happen (as Honda and Toyota finally figured out), their SUV business is doomed regardless of any medling from GM. They might get a second chance if Isuzu breaks free from GM, but what about hindering Mitsubishi's SUV program if in fact they are the top bidder?

      It is however obvious that Isuzu had to listen to GM and position themselves to concentrate on their core business of Commercial Truck. It is no news that Isuzu is very strong in this area. They are the leader of that industry (and for decades)in Japan, and other countries (sometimes by defalt). It is also no secret that GM has wanted to exit the CV business for sometime as they are bloated with bureaucracy and egos which deny them profitability. However, they need to still be in the CV business for brand recognition which translates into profit on the 3/4 & 1 ton HD side. This is where Isuzu comes to the rescue with CV experience, a stout Diesel program (both LD and HD programs)and a much cheaper staff minus the "legacy costs" that their (GM) current salary staff incurs. GM has the excess capacity and labor, dealer network, and purchasing power, whamo instant synergy! This is the best position for Isuzu in the U.S., and without getting too far ahead of myself, I believe this is the path they will take.

      I am confused on your exact position as nobody is "interested" in Isuzu unless they are a employee, analyst (financial or media)or dealer principle (or representing one) who has been kept in the dark. Sorry about the spelling on Randy. His last name I believe is spelled; Schwarz. He is a CV business icon who is now reaping his reward in some Cadillac position. Wish he was back....
      • 8 Years Ago
      Yay! NO ONE CARES MITSU!
      • 8 Years Ago
      Koba is right. 7.9% is owned by GM, not 12%.
      This is very, very old news because Isuzu, come hell or high water has been buying back its stock from GM for since 2001 steadily.
      2007 Earmarks the official end to all ties (unless something changes).. with the exception of selling Duramax Diesels to GM, and the cebadged Colorado/GMC canyon platform also shared with the Isuzu I-max line.
      This is great news for Isuzu because they can begin selling cars in the US again somewhere around 2008-2009.
      Word on the street is Isuzu is preparing to sell a full lineup instead of only trucks.
      Isuzu will no longer have GMs dark hand around their necks.
      When GM prevented advertising and marketing of thier own vehicles as its been since 1985, It has hurt Isuzu's reputation here in the US.
      GM's plan all along.
      We will have to wait and see what happens.
      I would like to see Isuzu sell its I-max here (Dmax outside the US) with the 3.0L Turbo Diesel.
      That would make for a pretty practical truck.
      I really like the older Isuzu models, particularly the Impulse, which set the stage for design cues that every manufacturer since the late 70s has since copied.
      Steve, merging would be an excellent Idea, but its hard to say who would be wearing the pants between 4 different companies.
      :)


      kent Paul
      • 8 Years Ago
      A few more comments, from the auto analyst side- 1.Isuzu was almost out of cash/out of business. Nissan was in the same boat till renault took control and stock of them. With gm owning almost half the stock in Isuzu, they needed to lower that stake to aviod any potential liabilities that would derive from a bancrupty. So they bought more control in the duramax plant from 40 to 60% and some other exchanges like that. Diluted the Isuzu ownership, but also lowered gm's stock ownership. Recently, based on news reports, Isuzu bought or will buy back that stake as well as other truck production and sales facilities and operations in autralia and south america. 2. It is gm selling the stock and they benefit from the stock sale @34.50 a share. 3. not sure where you are hearing that they are coming out with cars. they are a truck manufacturer, body on frame expertise. they have no car platforms and no longer even have any of the older imputlse/stylus platforms that they could have done a crossover vehicle. The axiom was a crossover but still on a frame-very sturdy but not as light as they would like. drove one for while as a rental car and it was great perfoming, handling fun vehicle. I thought it was very solid. In 92 with the final year of the stylus coming they did have a redesign of the car platform but at a tooling cost of 900 million+, and small cars in general not being profitable, and their profits/net cash postion taking a slide as well, due to the economy in the Asian market, they elected to not go forward with cars and to get out of that segment. 4. As far as advertising, I have never heard of any gm inpout into their advertising at all. There is very little interaction bewtween GM and Isuzu US. they are hands-off, have nothing to do with each other and have nothing to do with dictating advertising. Isuzu does not even use GMAC, which woudl have been a defintie tie-in, had they had anything to do with each other. They do not advertise due to product selection, cost and expected cost-benefit results. GM FORD and DC EACH spend over 1.3-1.4 Billion in advertising a year, and look at their sales and market share declining. 5. as far as using cheper parts, the Isuzu commericial trucks are designed and made in Asia, and I do not beleiove or think they are buying cheaper made parts. These products are sold through out the WORLD and have a solid reputation and I doubt that Isuzu or any japaneses brand will substitiute less quality components. They take a lot of abuse on 3rd workd countries and need the longevity.
      6.One final comment, I detest and abhor all the BS about legacy costs, and the need to lower pension benefits given in prior years. this is PR scam on behalf of American companies as a way of throwing the public and the unions off guard. If this is thier mentality then they - and GM deserve to go out of business. case in point, they want to take back those benefits from those salaired and production workers, that were earned iduring the years when they were making huge profits and paying thier exec;s and stockhodler HUGE profits. Have you ever heard of them saying to take back the excessive millions they over paid to their top managment staff? salaries-benefits-stock of 10-15 20- 50+ million a year? All those bonuses paid out when they were making tons of money. don't forget, due to thier bad management practices and bloated salaries and greedy stock and cash bonuses and options, these comapnies were making tons of money. It is only a few recent years that they are in the red. they are basing their takebacks on a few recent years, but over the long haul look how much excessive profits they were making, and paying to their stockholders and top brass. don't let them scam you like they are trying to scam the american public and the unions. those LEGACY costs came as part of their LEGACY PROFITS they have squandered due to short term managment by deception strategies. Those legacy profits, well, no one ever compalined about them at the time, but with a few years losses due to thier bad managment now they want to use it as an excuse? BS I say. let them first take back all those multi millions from their overpaid execs's before they cry poor mouth. another note, in Japan, the top execs/highest paid exec's are allowed to only make X amount over their lowest paid worker, in order to keep things in some degree of parity and equitable status. no such plan with greedy american corporate managment and exec's, and that includs not only gm but also ford, d-c, GE, exxon, Chevron, MS, etc. and most other american short term focused companies. Is any one perosn/exec or mangemetn really worth over a million bucks, other than to stick it to the workers stockholders and the consumer? Or those loated golden parachute scams? they should all be put in jail. No pity here, let gm ford and any other company die. well maybe not ford, I own their stock. Ok, sorry , just had to get that off my chest and vent, hope it all prov
      • 8 Years Ago
      Wow.. I dont want to squeeze between Kent and Jeff on this one!
      LOL.
      Ive actually placed a bit of speculation on what Isuzu may do for the future, but without being an employee im blind.
      As far as commercial sales, Isuzu has done absolutely fantastic (just as you said Jeff) and that is the major reason Isuzu has been able to buy back its stock from GM.. Commercial sales.
      Isuzu at one time was doing pretty well with autos here in the US.
      As far as Kents comment on "using substandard parts" which was originally what I had mentioned, in one situation, GM did have Isuzu use a cheap heat treating process on Isuzu's transmission gears (particularly with the Storm)but you cannot say that GM hasnt pulled crap like that in the past with other products.
      It was strictly a "cost saving" measure at the expense of the consumer.
      GM also used its own very,very, poor ignition and computer systems in Isuzu products starting in 1989.
      I worked as a Manager at Als auto for 7 years and I saw just about everything you can imagine.
      Not with just Isuzu either.
      ANYTHING that had GM Electronics from 1980-1996 in general were very unreliable.
      Even today they know how to build more of the same, just have less models to do it with.
      I can say Quality has improved, but you can put a nice shine on any car, market the hell out of it and sell it to even a critic.
      In other words.. Real world driving will always prove the turd from the golden goose.
      As far as Isuzu SUVs, I really want Isuzu to do well in the truck market here in the US.
      But all the "buzz" im hearing about building cars again.
      To me, it seems like a very strong possiblity even if they were just to test the waters here in the US.
      I have little reason to doubt Isuzu going back into the car business.
      Am I wrong to think this Jeff?
      Jeff, you are right about Isuzu building things that are "ahead of their time".
      Ive always thought that with my 88 Impulse and its history dating back to 1978.
      The Axiom was another Isuzu vehicle that was doing what nobody else did as you said.. Super crossover.
      The Vehicross (I remember the concept back in 1993) was a very futuristic design and was a very dynamic vehicle, although a bit impractical as it felt like a "Cross" between an Amigo and an Axiom in my opinion.
      Im sad the Rodeo and Trooper didnt remain here, but I again have heard rumors that the Trooper WILL be coming back to the US, as a totally redesigned model in the next couple years.
      Again Jeff, you are right about Isuzu not following GM avenues of marketing, but Im glad they dont honestly.
      GM marketing leaves MUCH to be desired even though GM has done pretty well with Suvs.
      GM also is still trying to sell Suvs at a time when Fuel prices are unstable.
      One of several reasons for its current "failures" regarding its internal health and welfare.
      But also consider this point:
      Where would Isuzu's lineup be today without GM influence?
      Isuzu has done pretty well with the Rodeo and Trooper and like you said, the Axiom wasnt well recieved.
      As far as I can tell GM did nothing but stifle EVEN the truck division as Isuzu never had anything but mild redesigns and refreshes through the 90s and early 2000s.
      There was no real excuse to cut off a Hot I mean RED HOT seller like the Storm!
      I even seen the Isuzu Impulse Prototype sitting in a parking lot scheduled for 1995 release.
      Which would have also been the new "Storm".
      As sexy as that car was, (also ahead of its time) it would have been a terrific seller Im almost 100% sure.
      I guess what Im saying here, is that "figuratively speaking".. A silent killer called GM did nothing but cause Isuzu more grief.
      Sure, Isuzu Commercial Division has done wonders for GM in that Isuzu provides them with an Excellent Diesel Engine for their fullsize pickups, a platform for the Colorado and Canyon twins and more future developments in the drivetrain department for other future GM vehicles.
      But isnt it true that now that GM only owns 7.9% of Isuzu, that Isuzu now had full control of its own marketing and sales?
      I dont think if GM owned 49% (and controlling interest) of the company like it did prior to 2001, I would feel that Isuzu had anything less than a "shit end of the stick".
      GM has always had a habit of making BAD marketing decisions and killing the car division for Isuzu was really not a good move considering GM and Isuzu were making money.
      Even with strong commercial sales, Isuzu still could have easily been producing a small lineup of cars?
      Today, Isuzu is in a perfect position (in my opinion) to pickup the pieces and start building a full lineup again.
      Id be VERY interested in an Isuzu (Impulse or Bellet GT), and definately a Diesel I-Max with maybe a slightly re
      • 8 Years Ago
      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.
      • 8 Years Ago
      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.
      • 8 Years Ago
      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.
      • 8 Years Ago
      I think SAAB is one of the only brands GM has stakes in that is really unprofitable. Suzuki, Fuji(Subaru), and Isuzu are all profitable globally. If GM sells their Isuzu stakes to Mitsubishi it will be a win-win situation for them all. GM would get the much needed money, Mitsu would get some diesel and truck expertise from Isuzu, and Isuzu would be able to build and sell their pickup in Mitsu's under used US plant. I hope to see the deal done soon for GM's sake.

      I can see Isuzu coming back into the car business. All they need is like four solid cars and they would do find. Their D-Max pickup, a new Rodeo based on the D-Max that could be marketed as a budget enthusiast SUV to compete with the Xterra and FJ Cruiser, a practical sub-compact based on the Mitsubishi Colt that would do wonders globally for its image, and last but not least a new Impulse based on the new Lancer platform and aimed at the Civic 2dr and Scion tC. I think Mitsubishi buying these stakes would do wonders for both companies, I don't see how it could go wrong or get any worst.
      • 8 Years Ago
      "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.
      • 8 Years Ago
      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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