Volvo White and GM tie the knot
Page 8
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• After its abortive attempts to join with Leyland and Enasa, General Motors has finally teamed-up with Volvo White, as suggested in last week's CM, in a bid to save its ailing US heavy truck business.
The proposed merger, however, will not include GM's light or medium truck business, or effect its British Bedford operation.
Both companies have signed a memorandum of understanding to form a joint venture company to develop, produce and sell heavy duty (Class 8) truck in the US and Canadian markets.
Volvo White looks set to be the dominant partner. It will have at least a 65% ownership and operational responsibility for both joint ventures. Volvo White and GM are planning to start up the new company, which will be called the Volvo GM Heavy Truck Corporation, and based at Greensboro North Carolina, later this year. It is expected to become fully operational within two years. The Canadian venture will start in 1987.
Any deal, however, is still subject to Volvo and GM reaching a final agreement and approval by government authorities.
No immediate plans have been revealed for future products, although developing a new cab for both White and GM trucks could be one area. The use of Volvo components in GM trucks is also a longterm possibility according to Volvo in Sweden.
In a joint statement, Sten Langenius, president of Volvo Truck Corporation, and Charles Katko, GM vice-president and Truck and Bus Group executive claimed: "The two partners complement each other. By combining the Class 8 operations of Volvo White and GM in North America, we can build up an effective pro
duction and distribution organisation."
In addition the new company will provide for "an aggressive product development strategy for the 1990s and beyond."
The merger would give the joint company a potential US market share in the Class 8 sector of around 15%-ahead of Freightliner, the DaimlerBenz owned US truck-builder and level with Mack, Peterbilt and Kenvvorth.
Last year GM and Volvo White sold 23,027 trucks be tween them in the Class 8 sector. In first place was Navistar (formerly International Harvester) with 30,065.
Under the joint venture, the manufacturing operations will be based at Volvo/White's existing plants in Virginia, Ohio and Utah. GMC models will continue to be sourced from GM's heavy truck plant in Pontiac Michigan.
According to Volvo Trucks, market demand will determine which products will ultimately be built and in what quantities.