GM revealed today that it's "considering strategic options" for one of its more well known subsidiaries, Allison Transmission, which produces automatic trannies for both commerical and military sale. In boardroom-speak, that means they want to sell it off. GM's turnaround has been aided so far by its strategy of selling non-essentials like the stakeS it held in both Subaru and Suzuki, so we're not particularly surprised to see a For Sale sign on Allison.While doing a bit of research for this post we stumbled on an entry in Wikipedia for Allison Transmission and learned some pretty interesting stuff about the company's history. It's founder, James Allison, was one of the four original businessmen who financed the construction of the Indianapolis Motor Speedway in 1909 and started up the Indy 500 in 1911. The company also got into aviation engines and was the only U.S. manufacturer to develop and produce a V12 liquid-cooled engine during WWII. Finally, Allison Transmission was one of the driving forces in developing GM's two-mode hybrid drivetrain that first saw use in commercial buses before being adapted for passenger car use.
Allison Transmission is clearly a storied old American company, so it will be very interesting to see who, if anyone, steps up to buy it.
[Source: GM]
PRESS RELEASE:
General Motors Considering Strategic Options for Allison Transmission
NEW YORK -- General Motors (NYSE: GM) today announced that it is looking at strategic options related to its Allison Transmission commercial and military operations, including a potential sale of the business. This process is another potential step in GM's plan to improve liquidity through the assessment of strategic options for a business that is not central to GM's mission of designing, manufacturing and selling cars and light trucks globally. GM continues to have a strong liquidity position, with more than $20 billion in cash and marketable securities at the end of the third quarter 2006.
Allison Transmission has a track record of strong business performance and is the leading seller of automatic transmissions for commercial vehicles. The company designs, engineers, manufactures and sells automatic transmissions for commercial and military vehicle applications. Headquartered in Indianapolis, Ind., Allison Transmission employs 3,400 people, has 7 plants in Indianapolis and sells automatic and powershift transmissions, product parts and support through a worldwide distribution network and sales offices throughout North America, South America, Europe, Africa and Asia.
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Reader Comments (Page 1 of 1)
stan @ Jan 25th 2007 4:02PM
they sold detroit diesel so it only makes sense. i think it is interesting to point out that it is the only profitable division of the general right now.
dis_guy @ Jan 25th 2007 4:07PM
Is Allison the one that made that transmission for the Sierra Denali's? I can't remember, so if some one could clarify this would be helpful.
Brent @ Jan 25th 2007 5:12PM
I believe Allison's only product in GM's light duty applications where when it was mated with the Duramax diesel in their pickups.
naif @ Jan 25th 2007 7:22PM
why does anyone sell something that is making money?
companies that sell off what they deem as "core" business that is making money is like politicans telling us they will not be running for whatever office so they can "spend more time with the family".
Steve @ Jan 25th 2007 8:44PM
Think a Chinese company will buy it? I've actually wondered for a while how long it will be before a Chinese company attempts to scoop up Ford or buys Chrysler from Mercedes (if the spin off rumors are true). They each come with baggage, but they also have a lot of tech and design that could jump start a Chinese company's entry into the US.
Barney @ Jan 25th 2007 10:18PM
More and more commercial truck fleets are going for the Allison transmissions. Allison has competition with the semi automatics in the same market as well. Perhaps to much competition.
big L @ Jan 26th 2007 12:10AM
Probably Toyota will buy it like it did the other cast-offs. Seems short-sighted to me.
uncle john @ Jan 26th 2007 3:45PM
NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!!! Don't do it!!!!!! BiiiiiiG Mistake!!!
Made in USA @ Feb 6th 2007 1:07PM
Why not sell Allison? The general has sold Detroit Diesel, Hughes, EDS, Direct TV, Delphi, and Electromotive Division. GM does not have to make a profit on any vehicles as long as it can sell or spin off divisions. Well, GM Allison is the last division to cast off, only because government antitrust wouldn't allow a sale to ZF of Germany in the early '90's. The general is running out of things to sell. GM wouldn't want to risk one cent of shareholder profit to invest in new and exciting technologies. The sale of all of these divisions is truly sad. Detroit Diesel is back on top with Penske/Daimler Chrysler management. Electromotive has only one major competitor - GE. And GM thinks it couldn't compete? I think Mr Durant and Kettering would be shaking their heads at the situation GM is in right now. These men had a vision for a great company, which GM was. When GM quits blaming legacy costs on their problems and puts executive greed aside to focus on manufacturing again, GM may have some great products again. The question is- Will GM ever do it? Let's hope management can see past today and see what is ahead for tomorrow. And by the way, don't sell Allison or for that matter, any more divisions of GM. Are you listening GM?
gmi @ Apr 17th 2007 3:13PM
This is truly sad, like learning that your dad is terminally ill, or Charleton Heston's announcement that he has been diagnosed with Alzheimer's...
As a former employee with the Allison Division having been given the benefit of a cooperative engineering education at General Motors Institute, I witnessed the marriage and divorce with Detroit Diesel as the field organizations merged and later dissolved as Detroit Diesel Market share plummeted in the early 1980's in response to reliability and fuel economy problems inherent to the then 2 stroke design. At the time that Detroit Diesel was tanking, Allison was expanding its lineup and besting the Cummins Sunstrand "Responder" competition.
Diesel appeared to be initially on the block to John Deere, but this was quashed by labor unrest at Deere, and Diesel later sold to Penske, who in turn resold the division to Mercedes.
The GM stock I purchased as an employee at 50 to 80 per share has decined to less than half its original value (except for the converted Delphi stock which has gone bankrupt)
In its heydey at over 50% market share, GM was concerned about the Justice department slicing off Chevrolet from GM - how times change!
My impression is that Allison has been a crown jewell of GM's holdings, as a relatively profitable division with very little domestic competition. Maybe the news of the potential sale of Allison will get me to quit waiting for the GM comeback and accept their decline and my own stock loss