General Motors Corp and International Truck and Engine Corp, the principal operating subsidiary of Navistar International Corp, have entered into a non-binding memorandum of understanding under which Navistar would purchase certain assets, intellectual property, and distribution rights for GM's medium-duty truck business.
As proposed, Navistar would acquire GM's medium-duty truck business, which includes assets and intellectual property rights to manufacture GMC and Chevrolet brand vehicles in the Class 4-8 gross vehicle weight range. It also includes purchase of the related service parts business. Navistar would sell a competitive line of Chevrolet and GMC vehicles and service parts through GM's proprietary dealer network in the United States and Canada.
Navistar would add the GMC TopKick and Chevrolet Kodiak truck brands to its portfolio of brands, which currently includes International brand trucks and tractors, IC brand buses, Workhorse brand chassis for motor homes and step vans, and MaxxForce brand engines.
When a deal is definitively concluded, production of the vehicles would move from GM's plant in Flint MI to a Navistar facility to be named. GM would retain ownership of its Flint plant and continue to build other products at the facility.
GM will continue its medium-duty truck relationship with Isuzu to market W-Series trucks through GM's medium-duty dealer network.
The deal is expected to close in 2008 subject to completion of satisfactory due diligence, the negotiation of a definitive purchase agreement, customary regulatory clearance and board approval. Upon closing, transition of the business could take several months to conclude.