After unsuccessfully trying to find a buyer for four years, General Motors Corp. is giving up on its medium-duty truck business, saying that it will wind down manufacturing by the end of July.
That means GM will stop making the GMC Topkick and Chevrolet Kodiak commercial trucks at its Flint, Mich., assembly plant by July 31. The plant employs 2,100 people but also makes Chevrolet Silverado and GMC Sierra pickups.
Company spokesman Jim Hopson said 398 people work on the medium-duty assembly line, and GM is working with the United Auto Workers union to determine what happens to them.
“We’ll continue to try our best to keep the employment levels as high as possible,” he said.
The factory last year made more than 22,000 medium-duty trucks for GM and Isuzu Motors Ltd., and almost 73,000 pickups.
Hopson said GM will work with dealers to sell down the remaining Kodiak and Topkick inventory over the next 18 months or so.
The DMAX factory in Moraine, Ohio — a joint venture between GM and Isuzu — also will be affected. The plant near Dayton makes engines for the Topkick and Kodiak, as well as for pickups and heavy-duty trucks. GM says the staffing of that plant, which employs 544, is under review.
Medium-duty trucks normally are built for commercial use such as dump trucks and tow trucks. GM’s main U.S. competitors in the segment are Navistar International Corp., Isuzu, Freightliner, Volvo Truck, Peterbilt, Kenworth and Mack.
Hopson said the market segment has been hit hard by the economic downturn. Sales dropped 30 to 40 percent from 2007 to 2008 and have dropped by a similar percentage so far this year.
“We definitely are being affected by the economic conditions just like everyone else,” he said.
GM hasn’t been competitive in the global medium-duty business, CEO Fritz Henderson said at an event to unveil a new battery lab at the automaker’s Warren Technical Center.
“We’re a one-truck company in a global truck world,” he said. “We compete with companies that have a full portfolio of them on a global basis. In the end we just couldn’t make it work.”
Dealers will be given up to 18 months to sell their remaining products, Hopson said.
GM has 470 dealers that sell medium-duty trucks, 129 of which sell them exclusively, spokeswoman Susan Garontakos said. All will get letters Monday notifying them of the decision, she said. Many of the dealers sell heavy-duty trucks or other GM vehicles, she said.
GM in December 2007 signed a tentative deal with truck and engine maker Navistar to sell the medium-duty business, but the deal fell through. The company also was in negotiations with Isuzu but couldn’t reach a deal.
“We just never could get to a level of agreement that was mutually beneficial to both a buyer and General Motors,” Hopson said.