Navistar and General Motors are no strangers in business. For years Navistar coveted the lucrative medium duty trucks division at GM, even pursuing a buy-out of the division until the financial crisis in 2008-2009 shrank the market and forced both companies to walk away from a deal. Six years later, Navistar and GM proudly announced a new joint venture that will challenge Ford’s dominance of the Class 4 and 5 commercial truck market.
This new deal comes on the heels of Ford’s decision to end the Blue Diamond collaboration with Navistar in order to release a new series of Ford medium and heavy duty trucks. Bill Kozek, President of Truck and Parts for Navistar, touts GM’s advanced technology and customer focus as the primary reasons why Navistar chose GM as their new business partner. The new venture allows for the design and manufacture of new medium duty trucks using Navistar’s expertise in medium duty frame and chassis construction, paired with GM’s powerful engine and commercial parts.
General Motors sees the new arrangement as a boon for consumers. Though GM’s light duty pick-ups have been popular with consumers for decades, those same buyers lacked choices when making purchases for their fleet or business. Under the Chevy brand, GM will reintroduce a series of medium duty trucks that will compliment existing Chevy fleet offerings, and make Chevy vehicles the go-to brand for all fleet purchases.
The announcement is especially good news for Springfield, OH, home of Navistar’s manufacturing plant. The community lost several hundred jobs during the recession, but the new truck line, scheduled for production in 2018, is expected to return more than 300 jobs for the duration of the arrangement. Navistar will also invest more than $10 million dollars to increase factory production and new equipment.
Both Navistar and GM should reap substantial financial rewards as a result of their business partnership. GM brings powerful brand recognition and state-of-the-art components, while Navisar provides years of experience and a laser focus on the medium duty truck market. In the end, the true winners of the agreement will be commercial consumers, who will have greater choices in their fleet purchases, and more competition for their dollars.