Navistar Adds TopKick, Kodiak Brands Through GM Division Acquisition

General Motors Corp. confirms it will sell its medium-duty truck business to International Truck and Engine Corp., a subsidiary of Navistar International Corp.

A memorandum of understanding between the companies says Navistar will acquire the assets and intellectual property rights of GM’s medium-duty truck business, which builds GMC- and Chevrolet-brand vehicles in the Class 4-8 range.

Related service parts business also falls under the agreement.

For GM, the deal signals increased focus on its core light-vehicle business. For Navistar, it portends expansion for its commercial truck business.

Navistar’s commercial truck expertise “makes them an excellent choice to acquire and continue growing the business,” Troy Clarke, president of GM North America, says in a statement. “We intend to work closely with Navistar to make this transition seamless to our dealers and customers.”

Says Daniel C. Ustian, Navistar chairman, president and CEO: “(Navistar) will utilize the scale to build on the success of both the International and GM product lines and their respective distribution networks.”

The deal adds the GMC TopKick and Chevrolet Kodiak truck brands to Navistar’s lineup, which currently features International-brand trucks and tractors, Workhorse-brand motor home chassis and MaxxForce-brand engines.

Production will move from GM’s plant in Flint, MI, to a Navistar site the truck maker does not identify.

The deal is expected to close in 2008 “subject to completion of satisfactory due diligence, the negotiation of a definitive purchase agreement, customary regulatory clearance and board approval,” GM says in a statement.

The sale follows speculation fueled by GM’s recent contract settlement with the United Auto Workers union. That agreement outlined GM’s plans for numerous production sites, but left unclear the future for its medium-duty truck business.