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  • Blake Noble
    Blake Noble

    Déjà Vu: GM Really Wants a Slice of Isuzu Motors

    Blake Noble

    Editor/Reporter - CheersandGears.com

    May 3rd, 2012

    At one point in the past, General Motors held a 49 percent stake in the Japanese automaker Isuzu. Over the years however, as GM’s market share eroded and the Detroit car company began fighting against the tides of red ink, it began selling off its shares in Isuzu until the alliance came quietly to an end. In 2006, it sold off its last 7.9 percent stake in the company for a reported $300 million dollars in order to fund restructuring efforts that were badly needed at the time.

    History is about to repeat itself then, as General Motors is reportedly in talks with Isuzu Motors to form a new alliance. This past Sunday, Japanese newspaper Nikkei reported that GM could buy a 10 percent stake in Isuzu. The two automakers would collaborate on developing pickup trucks and selling vehicles in Central and South America, as well as Asia. Isuzu could also benefit from access to GM’s hybrid know-how and other fuel saving technologies.

    Since emerging from bankruptcy in 2009, GM has been focused on striking up new partnerships. Most notably, GM recently bought a 7 percent stake in Peugeot-Citroen SA back in March that cost $423 million dollars.

    While General Motors may be set to take 10 percent of Isuzu, it’s also rumored that GM initially wanted to buy 33.4 percent of the automaker — which amounts to roughly one-third — at a cost of $3 billion dollars. If GM didn’t scale down how much of Isuzu it wanted to buy, it would give GM the right to veto any decision made by board members.

    Source: Reuters 4/29/12, Reuters 5/2/12

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    What's next, 20% stake in Suzuki, 20% stake in Subaru, 50% stake in Fiat?

    I think GM is scared about the cash in its coffers being eyed by other companies especially the investment firms.

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    Isuzu still is one of the worlds biggest Diesel engine makers and suppliers from what I understand. Since Isuzu built to GM spec the Duramax, it would only make sense for GM to tie up with them again for access to their very large portfolio of Patents in regards to diesel technology.

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    Medium Duty Trucks. Since GM has gotten out of the business, I believe it is hurting their profits. Look at how many medium duty trucks Ford sells! The biggest GM truck you can get right now is a 3500 (1-ton)... ask RAM how many 4500 and 5500 RAM chasis cabs they sell... ask Ford the same question with the F-450 and F-550. Heck, look at how many F-650 and F-750 trucks are on the roads. GM got out of this market with the Topkick/Kodiak trucks and likely shouldn't have (I understand the fleeting cash problem pre-BK, and then the BK, caused most of the changes in GM).

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    but why tie back up with Isuzu? They already have all of the know-how.

    Reason to tie back up is as I stated, their ongoing ever growing Diesel portfolio of Patents. GM got access to what went into the Duramax at that time and the right to use it to build other size engines. Yet Isuzu never stopped creating and building new diesel technology and clearly one of their newer patents GM must want.

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    Oldsmoboi, on , said:

    but why tie back up with Isuzu? They already have all of the know-how.

    Reason to tie back up is as I stated, their ongoing ever growing Diesel portfolio of Patents. GM got access to what went into the Duramax at that time and the right to use it to build other size engines. Yet Isuzu never stopped creating and building new diesel technology and clearly one of their newer patents GM must want.

    It's gotta be something they want....just not sure what.

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    Saab is next, then some Italian auto maker. Spread the green.

    SAAB is DEAD, Let it rest in the history books. I still expect additional consolidation in the auto industry as Europe closes down their way over capacity of plants.

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    SAAB is DEAD, Let it rest in the history books. I still expect additional consolidation in the auto industry as Europe closes down their way over capacity of plants.

    Europe will not close much overcapacity without long painful strikes and some economic unrest. Some more automakers may have to go into liquidation for the European car market to right-size itself.

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    SAAB is DEAD, Let it rest in the history books. I still expect additional consolidation in the auto industry as Europe closes down their way over capacity of plants.

    Europe will not close much overcapacity without long painful strikes and some economic unrest. Some more automakers may have to go into liquidation for the European car market to right-size itself.

    I agree, I expect the next 2-5 years to be very painfull in Europe and if the European Union survives then we will see some real growth out of this area. The socialist system will either take total control and destroy competition to keep things status quo or we will finally see a merging and radical change to allow true growth and reduction of debt.

    The world cannot continue at this pace of debt and survive.

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    Well according to the market watchers GM is into Isuzu again for 2 main reasons. One is South East Asian markets where GM is still not a strong presents and two present and future diesel technology.

    Believe it or not GM is still weak in some markets that Isuzu would make them a stronger presents in and even if we don't see them the diesel engines are a must in other global markets. It is a fast easy way to get some good engine that they can use in future products.

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