General Motors Corp., the largest U.S. automaker, may sell its medium-duty truck business as it focuses on making a profit from building cars and light trucks.
"We are considering options for our medium-duty truck business to better position the unit for growth," GM spokeswoman Melisa Tezanos said Wednesday. She wouldn't comment on potential buyers. GM doesn't break out the unit's financial results.
The unit last year built about 40,800 Chevrolet Kodiak, GMC TopKick and Isuzu T-Series models, for uses such as dump trucks and delivery vehicles. The Flint Journal reported this week that Navistar International Corp. may be interested in the Flint-based unit, which employs about 500 people. Roy Wiley, a spokesman for Warrenville, Ill.-based Navistar, declined to comment.
"This deal makes so much sense, I hope it gets done," Bear Stearns analyst Peter Nesvold said Wednesday.
He estimated that the medium-duty truck business has annual revenue of about $2 billion and is worth $450 million to $500 million. If Navistar were the buyer, the new production could add 50 cents to $1 a share to that company's earnings, he wrote in a report Tuesday.
GM has sold more than $16 billion in assets in the past two years to pay operating costs as the Detroit-based company posted net losses of $12.4 billion.
Chief Financial Officer Fritz Henderson said last month that GM is still reviewing options for assets, including the Allison Transmission unit in Indianapolis, that are outside its main automotive operations.
The company is under pressure to increase sales of cars and light trucks in the U.S. after Toyota Motor Corp. outsold GM worldwide last quarter for the first time ever.
GM forecasts global sales of 9.2 million cars and trucks, while Toyota expects to sell 9.34 million.
GM's asset sales include 51 percent of its finance unit to a group led by Cerberus Capital Management LP, raising $13 billion over three years, and stakes in Suzuki Motor Corp., Isuzu Motors Ltd. and Fuji Heavy Industries Ltd., raising $3 billion.
GM's cash, marketable securities and funds available from a retiree health care fund fell to $24.7 billion at the end of March from $26.4 billion at the end of December as GM made a $1 billion payout to GMAC and another $1 billion for a convertible bond payment.
Nesvold, who is based in New York, rates GM shares "outperform" and Navistar shares "peer perform."
GM shares fell 23 cents to close at $31.74 Wednesday. Navistar's rose 45 cents to $64.85.
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