General Motors Corporation dumped another business today as it announced plants to halt production of medium-duty trucks in Flint, Michigan, at the end of this July.
GM’s decision was forced by the swift and precipitous decline in the value of automotive related assets around the U.S. In the end, GM simply couldn’t find a buyer for the business.
“After four years of working with multiple potential buyers, General Motors has decided to wind down its medium-duty truck operations,” the company said in a statement.
Production of the Chevy Kodiak and GMC Topkick will cease by July 31, 2009.
Last August, Navistar, the Chicago-based truck company, backed out of a deal to acquire GM’s medium-duty truck operation.
The move will eliminate the jobs of 398 hourly and salaried employees now assigned to medium-duty line at GM truck assembly plant in Flint, GM officials said.
GM spokesman Jim Hopson said employees were notified of the impending shutdown of the medium-duty line on Monday. The company also sent out the required Warren Act notifications to employees and to the United Auto Workers union. Sales of medium-duty trucks dropped from 27,224 units in 2007 to 20,832 in 2008 and have faded again this year, falling behind even last year’s depressed rate, Hopson said.
GM also sent out letters to dealers handling the trucks, notifying them of the decision to terminate their franchise agreements.
GM spokeswoman Susan Garantakos said GM has 129 stand alone GMC medium-truck franchises across the country that are affected by the company’s decision to halt production.
“If we aren’t producing trucks, we don’t need dealers,” she said.
Dealers have until Friday to accept the terms of the “windup” agreement, dealers said.
It’s a rough way for us to go,” said Jim Bostick, the owner Bostick Truck Center in Pontiac, Michigan, who said he had no advance warning that GM was getting out of the medium-duty business.
GM, which filed for protection under Chapter 11 of the U.S. Bankruptcy Code last week under pressure from the U.S. Treasury Department, has moved to shed several operations, announcing it was selling both Hummer and Saturn, pending bankruptcy court approval. Saturn will be acquired by the Penske Automotive Group.