GM purchases 50% of of Italian Diesel Firm

[Flybrian]

General Motors to buy stake in diesel engine manufacturer
Buys 50% of VM Motori from Penske Corp

July 16, 2007 | BY KATIE MERX | Link to Original Article @ Detroit Free Press

General Motors Corp. announced on Monday that it has agreed to buy a 50% stake in Italian diesel engine manufacturer VM Motori S.p.A. from Penske Corp. in a deal expected to expand GM’s diesel expertise in global markets.

“Diesel engines have a very important role in GM’s global advanced propulsion strategy,” Tom Stephens, group vice president of GM Global Powertrain and Quality, said in a statement. “We are leveraging expertise and resources within our company and through technology partners to ensure we develop the world’s best powertrains.”

GM Powertrain Vice President of Engineering Dan Hancock said during a conference call Monday that GM is particularly interested in VM Motori’s expertise building diesel engines for the mid-sized trucks that are used as commercial vehicles in Europe and Asia-Pacific.

Motori also makes diesel engines for passenger vehicles. And GM announced plans in March to work with VM Motori to jointly develop a new GM 2.9 Liter V-6 diesel for the Cadillac CTS in 2009 in Europe.

GM Vice Chairman Bob Lutz said in a video statement last week that GM will build diesel cars, crossovers, SUVs and light trucks for the U.S. market, though he did not say when.

But Hancock would not say on Monday whether the VM Motori investment is related to Lutz’s statement or whether GM plans to build a diesel Cadillac for the United States.

Automotive News has reported that the 2.9-liter diesel engine would most likely appear in the United States in the Cadillac CTS and Saturn Aura in 2009 and 2010.

Neither GM nor Penske would disclose the terms of the deal. But Hancock said he expects the deal to close by Sept. 30.

Ludvik Koci, a Penske director, said it’s hard to pinpoint when the GM deal will close. Currently, Penske is waiting for European regulatory approval of a deal in which it has agreed to buy 49% of VM Motori from DaimlerChrysler AG.

When that deal is complete, Penske plans to complete the sale of half of the 60-year-old Cento, Italy, company to GM. But that deal will also be dependent on regulatory approval, Koci said.

Officials at DaimlerChrysler were not immediately available for comment late Monday afternoon, due to the six-hour time difference between Detroit and Germany.

[Oracle of Delphi]

I just love all things Italian, and not just because I'm 50% Italian either.

[regfootball]

sweet

[Robert Hall]

Mmmmmm...more diesels.

[Cadillacfan]

Nice! I wonder if the recent sale of GM's Allison Transmission unit was done so the company could afford this. Now, GM technically won't be outsourcing its diesel for the upcoming CTS anymore.

I wonder though.. this certainly goes against recent claims by Lutz that GM doesn't see a real future for diesel engines but I guess if there is still a demand for those engines, you need to give it to them.

[Newbiewar]

thats just what we need... a deisel that revs to 8200 rpms... put it in the cien... no one will recognize it as american

[Gnitro]

This is great news, I would like to see a diesel (Turbo V-8 OR Twin Turbo V-6) engine in the G8. If there was then I would find a way to buy it.

[Flybrian]

I wonder though.. this certainly goes against recent claims by Lutz that GM doesn't see a real future for diesel engines but I guess if there is still a demand for those engines, you need to give it to them.

I was thinking that, too, but if you listen to him again and realize he was truly speaking extemporaneously and off-the-cuff, I think the message was, "I know you guys want diesels in everything. We can't do it for a multitude of reason and even if we did, we would still have an emissions/fuel economy problem. Diesels alone will not solve out problems and are not the best fit for every single car. But in applications that demand Diesels, we will fill them. And if we make something, you'd better believe GM will be #1."

[RJB]

GM has more engines in the works than you think. So of course 'ol Bob is going to be elusive when it comes to this.

Edited July 17, 2007 by RJB

[ZL-1]

“GM’s global advanced propulsion strategy,”

Why do they have to make everything sound so 'Star Trek'? That reads like they've just discovered the cure for cancer!

[CARBIZ]

Perhaps GM is just being smart (and proactive for a change) in hedging their bets with emerging technologies. A vehicle like the Volt, for example, which will carry a premium of $10k+, would be perfect in "rich" markets like North America and Europe; whereas diesel technologies are better for "emerging" markets, like Brazil, India, etc. that don't have as stringent emissions standards.

I think we may be on the edge of a fuel efficiency race that will eclipse the late '70s. It will be interesting to see which technology wins out.

[David]

I think if GM can build a variety of sized Diesels that are quite like the Duramax, does not have the dark emission output, then the public in the US would endorse these engines.

Course, once Honda and Toyota bring their diesels to market, then everyone including the stupid Consumer Reports will say diesel is the god send saving engine and the american Auto makers still do not listen to what the public wants.

Wish we could dump that drug laced CoolAid so many people seem to be drinking.

Diesel Rocks!

Edited July 17, 2007 by dfelt

[enzl]

I think if GM can build a variety of sized Diesels that are quite like the Duramax, does not have the dark emission output, then the public in the US would endorse these engines.

Course, once Honda and Toyota bring their diesels to market, then everyone including the stupid Consumer Reports will say diesel is the god send saving engine and the american Auto makers still do not listen to what the public wants.

Wish we could dump that drug laced CoolAid so many people seem to be drinking.

Diesel Rocks!

Without getting too negative, bear in mind that the Fiat relationship and the Isuzu relationship were supposed to aid in producing world class diesels for GM as well...GM probably flushed 10X the money into those situations. They should be alot further along than they currently are in developing Bin 5+ diesels, as well as US emissions friendly engines.

AS far as Honda goes, they merely produce one of the world's finest 4 cylinder diesels for Europe, have anounced plans for 2009 intro's of 6 cylinder diesels for US product AND they will be 50 state clean with no Bluetec additives or overly complex emissions control equpment. (Toyota's diesel's are 1 gen behind---thus they've struck a deal with Isuzu, ironically IIRC, to bring them up to speed.)

Honda builds great engines, period. Even GM agrees. The general bought the 3.5 in the Vue from them for years!

[haypops]

It seems a little iroic that GM sold Detroit Diesel to Penske and now buys 50% of VM from penske.

[thegriffon]

Why? Completely different market segments. What is ironic is that GM is already using the VM Motori 2.0 L CTDI engine in Chevrolets, while Chrysler (which then had a 50% interest) decided to use VW's older, less powerful 2.0 L TDI engine (which isn't even common-rail) in the Caliber, Compass and Patriot. Will GM now make use of the excellent 2.8 L I4 truck engine VM is supplying for the new Wrangler rather than the current Isuzu and International 3.0 L diesels?