GM Sells Allison

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MikeC

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GM Sells Allison Transmission
28 Jun, 2007 GM

The Carlyle Group picked up this nifty little business for a cool $5.6 billion dollars. Nearly all analysts are heralding this as a fantastic move, and one that's good for GM. I, however, am not the average auto industry analyst. I actually think before I follow the crowd blindly.

Yes, its' true that Allison Transmission is not a "core part" of GM's business. However, this business provided a key element to one of GM's most profitable areas - trucks. Chevy and GMC diesel pickup trucks use an Allison transmission, and it's one of the main reasons that they sell so well. Allison transmissions are known for their ridiculous longevity, and they add a very credible name to Chevy's big trucks. Dodge has Cummins, Ford has Duramax, and Chevy has Allison. ( No, Duramax does not have the same ring as the other brands. )

Losing the Allison business does not automatically mean that GM will lose access to the transmissions. In fact, it's likely that they won't. However, this simply puts them in a very bad situation. If Allison's new owners decide that they want to raise prices on their fine transmissions by 20%, GM will have little choice other than to pay the price. Whether that means profits get cut or the prices on their trucks rise, there's no positive note.

GM, and Ford and Chrysler while I'm at it, have a bad problem of living in the here and now, rather than thinking forward. GM got a nice windfall today for the sale of Allison Transmission - $5.6 billion isn't exactly chump change. The problem is that they're setting themselves up for huge problems down the road - something they should be smart enough to avoid by now. It's a sad day for GM indeed.
 
I don't know, Mike. I thought the same thing when Ford bought Cummins but I don't see a lot of difference in supply, demand or quality for Cummins products. And I don't think Ford has cut International out of the engine business yet - or maybe they have and I just don't know about it.

I sure hope Allison doesn't get their reputation ruined. That was the ONLY reason I bought my Duramax with Allison.
 
MikeC":1ae2m5ri said:
GM Sells Allison Transmission
28 Jun, 2007 GM

The Carlyle Group picked up this nifty little business for a cool $5.6 billion dollars. Nearly all analysts are heralding this as a fantastic move, and one that's good for GM. I, however, am not the average auto industry analyst. I actually think before I follow the crowd blindly.

Yes, its' true that Allison Transmission is not a "core part" of GM's business. However, this business provided a key element to one of GM's most profitable areas - trucks. Chevy and GMC diesel pickup trucks use an Allison transmission, and it's one of the main reasons that they sell so well. Allison transmissions are known for their ridiculous longevity, and they add a very credible name to Chevy's big trucks. Dodge has Cummins, Ford has Duramax, and Chevy has Allison. ( No, Duramax does not have the same ring as the other brands. )

Losing the Allison business does not automatically mean that GM will lose access to the transmissions. In fact, it's likely that they won't. However, this simply puts them in a very bad situation. If Allison's new owners decide that they want to raise prices on their fine transmissions by 20%, GM will have little choice other than to pay the price. Whether that means profits get cut or the prices on their trucks rise, there's no positive note.

GM, and Ford and Chrysler while I'm at it, have a bad problem of living in the here and now, rather than thinking forward. GM got a nice windfall today for the sale of Allison Transmission - $5.6 billion isn't exactly chump change. The problem is that they're setting themselves up for huge problems down the road - something they should be smart enough to avoid by now. It's a sad day for GM indeed.
Click to expand...

Dodge has Cummins, Ford has :?: , GM had Allison, Isuzu & GM have Duramax.
 
Earl Thigpen":3b6xmpgh said:
I don't know, Mike. I thought the same thing when Ford bought Cummins but I don't see a lot of difference in supply, demand or quality for Cummins products. And I don't think Ford has cut International out of the engine business yet - or maybe they have and I just don't know about it.

I sure hope Allison doesn't get their reputation ruined. That was the ONLY reason I bought my Duramax with Allison.
Click to expand...

Ford only owned a very small share of Cummins and for a short time.

I hope so too.
 
Well... like all corporations. They are intertwined. Kind of hard to track it all down and by the time you do... it will change. :D

I found this on another site. Not sure who did the research or what has changes since then. But it will make your head spin.

:arrow: (1) Isuzu owned Subaru, and sold out to Fuji Heavy Industries, which was then jointly acquired by British Leyland and Ford.

(2) BL & Ford then spun off Fuji/Subaru into an independent company. Big mistake. Ford bought BL, and owned Isuzu outright. Big mistake.

(3) Isuzu entered into a joint development partnership with Navistar International. Stock interests were traded. Eventually, one of the projects would be a 7.3L V-8 light-duty diesel. Guess who picked that one up for use in its pickup trucks?

(4) Navistar also had entered into a joint development partnership with Caterpillar. One of the projects was a direct injection system that would be picked up by -- Ford. And Isuzu mediums.

(5) Caterpillar owned a large chunk of Bosch. GM owned another big chunk. And so did a third major player -- Daimler Benz. Bosch was the primary developer of Caterpillar's direct injection system. But GM forced Caterpillar to turn over its share of Bosch, and then forced Bosch to abandon direct injection in favor of developing an "improved" generation rotary injection pumps. The initial designs for those pumps had been brought to GM by former Isuzu engineers working for Ford.

(6) What did Caterpillar receive in return for giving GM its stock in Bosch? GM's stock in Cummins. Ford then sold its small share of Cummins stock because of antitrust regulations in the U.S. Caterpillar, on the other hand, avoided antitrust problems by a joint incorporation agreement with Cummins under a Brazilian operation named Inquardo, Ltd.

(7) Eventually almost all Cummins manufacturing and design were moved over to that part of the "house". However, that move proved so efficient and profitable that Cummins began to eat into significant markets for Caterpillar, so Caterpillar merged its manufacturing and design base with Cummins in Brazil, leaving skeleton operations only in places like Peoria, Illinois. Cummins management largely pushed out Caterpillar management after several years.

(8) With me so far? Caterpillar owns Cummins, but Cummins has effectively "eaten" Caterpillar. In Brazil. Here, they're separate, of course, but it's only the purposes of adhering to American commercial law. But wait. There's more.

(9) Ford had some disasterous capitalization-and-flow problems after the overseas buying spree of the early nineties, during which it acquired British Leyland, Isuzu, Fuji, part of Fiat, and parts of other companies. Ford was forced to sell Isuzu to maintain cash flow beyond the U.S. Who did they sell Isuzu to? Navistar International. Along with certain manufacturing and sourcing arrangements. Navistar hoped to go global again, as in the grand old days of International Harvester.

(10) But Navistar couldn't hold on to Isuzu either, what with a $2 billion dollar loss in 1995, and eventually sold its controlling interest in the company to Daimler Benz.

(11) Isuzu was having its own problems, since its global market share in light and medium diesels was rapidly shrinking. The cause of the problem was Cummins, which, after swallowing Caterpillar - in Brazil - had also acquired NGT, Tapei Technologies, Allison Canada, and Nansen-Renault, all in hostile takeovers, all manufacturers of diesel technologies outside of the U.S. So, Cummins had effectively cornered the controlling share of the global market outside of North America and Western Europe. (Why do you think the splashgate at their website is so heavily global?)

(12) After nine months of negotiation, Cummins and its subsidiary, Allison Canada, entered into a joint development arrangement with Isuzu, owned by Daimler, and with the surviving U.S. corporation, Allison, which was at that point partly owned by GM. Cummins, however, dominated the partnership, and eventually managed to assume Daimler's and GM's interests in Isuzu and and Allison.

(13) In the case of Isuzu, Cummins has an equal partnership with Daimler, which, of course, has also acquired Chrysler Corporation. That's why, when Ford offered Cummins a billion-dollar package to manfacture medium and light truck diesels for its vehicles in 2001, Cummins said no. Again, for antitrust reasons, a public holding company was set up to handle Isuzu as a separate corporate entity. The name of the company is Benz Transporation Technologies, of San Paulo, Brazil. BTT also is a major owner of the Benz division of Daimler Chrysler, which manufacturers most of the diesel engines in Europe. In the case of Allison, Cummins controls it through a series of holding companies ending with Inquardo, Ltd., the orginal Caterpillar-Cummins creation in Brazil. Cummins also controls a fair-size block of stock in GM, through the ownership of a cartel of South Korean and Thai banks and investment groups.

(14) Navistar has continued its free-fall in spite of its partnership with Ford in the light-duty diesel area. Three weeks ago, after the implications of labor troubles, a rise in basic resource costs, and the disasterous introduction of the 6.0L PSD had become clear, Navistar's financial arrangements with Citibank and Manufacturers B&T collapsed. Both banks arranged to float the company infrastructural loans if it would agree to a merger with -- are you ready for this? -- Inquardo, Ltd. As of last Thursday, Cummins owns 67% of Navistar through Inquardo.

Right now, Cummins makes all diesels in all pickup trucks sold in the United States. Cummins makes 73% of all diesels in all trucks sold in the world. The board of directors at Inquardo -- which isn't listed on any stock exchange -- includes 9 Cummins execs, 2 Caterpillar execs, and one Wells Fargo Bank exec. The CEO and CFO are also Cummins vice presidents. And there are Cummins execs on the boards of Daimler Chrysler, General Motors, Toyota, and Honda America. Ford, the holdout, has not been doing very well.

So it isn't a question of who owns Cummins. It's a question of who Cummins owns, and who's next. Could be Ford. Could be DC. Could be both. Ford Viper, anyone? Mercedes Mustang with a 6.0L Shelby Diesel and a Holset twin turbo?

And some have claimed that the new Navistar/Ford 6.0L is Cummins' revenge for the Bosch VP44"
 
Brute 23":1g0h3aoc said:
Well... like all corporations. They are intertwined. Kind of hard to track it all down and by the time you do... it will change. :D

I found this on another site. Not sure who did the research or what has changes since then. But it will make your head spin.

:arrow: (1) Isuzu owned Subaru, and sold out to Fuji Heavy Industries, which was then jointly acquired by British Leyland and Ford.

(2) BL & Ford then spun off Fuji/Subaru into an independent company. Big mistake. Ford bought BL, and owned Isuzu outright. Big mistake.

(3) Isuzu entered into a joint development partnership with Navistar International. Stock interests were traded. Eventually, one of the projects would be a 7.3L V-8 light-duty diesel. Guess who picked that one up for use in its pickup trucks?

(4) Navistar also had entered into a joint development partnership with Caterpillar. One of the projects was a direct injection system that would be picked up by -- Ford. And Isuzu mediums.

(5) Caterpillar owned a large chunk of Bosch. GM owned another big chunk. And so did a third major player -- Daimler Benz. Bosch was the primary developer of Caterpillar's direct injection system. But GM forced Caterpillar to turn over its share of Bosch, and then forced Bosch to abandon direct injection in favor of developing an "improved" generation rotary injection pumps. The initial designs for those pumps had been brought to GM by former Isuzu engineers working for Ford.

(6) What did Caterpillar receive in return for giving GM its stock in Bosch? GM's stock in Cummins. Ford then sold its small share of Cummins stock because of antitrust regulations in the U.S. Caterpillar, on the other hand, avoided antitrust problems by a joint incorporation agreement with Cummins under a Brazilian operation named Inquardo, Ltd.

(7) Eventually almost all Cummins manufacturing and design were moved over to that part of the "house". However, that move proved so efficient and profitable that Cummins began to eat into significant markets for Caterpillar, so Caterpillar merged its manufacturing and design base with Cummins in Brazil, leaving skeleton operations only in places like Peoria, Illinois. Cummins management largely pushed out Caterpillar management after several years.

(8) With me so far? Caterpillar owns Cummins, but Cummins has effectively "eaten" Caterpillar. In Brazil. Here, they're separate, of course, but it's only the purposes of adhering to American commercial law. But wait. There's more.

(9) Ford had some disasterous capitalization-and-flow problems after the overseas buying spree of the early nineties, during which it acquired British Leyland, Isuzu, Fuji, part of Fiat, and parts of other companies. Ford was forced to sell Isuzu to maintain cash flow beyond the U.S. Who did they sell Isuzu to? Navistar International. Along with certain manufacturing and sourcing arrangements. Navistar hoped to go global again, as in the grand old days of International Harvester.

(10) But Navistar couldn't hold on to Isuzu either, what with a $2 billion dollar loss in 1995, and eventually sold its controlling interest in the company to Daimler Benz.

(11) Isuzu was having its own problems, since its global market share in light and medium diesels was rapidly shrinking. The cause of the problem was Cummins, which, after swallowing Caterpillar - in Brazil - had also acquired NGT, Tapei Technologies, Allison Canada, and Nansen-Renault, all in hostile takeovers, all manufacturers of diesel technologies outside of the U.S. So, Cummins had effectively cornered the controlling share of the global market outside of North America and Western Europe. (Why do you think the splashgate at their website is so heavily global?)

(12) After nine months of negotiation, Cummins and its subsidiary, Allison Canada, entered into a joint development arrangement with Isuzu, owned by Daimler, and with the surviving U.S. corporation, Allison, which was at that point partly owned by GM. Cummins, however, dominated the partnership, and eventually managed to assume Daimler's and GM's interests in Isuzu and and Allison.

(13) In the case of Isuzu, Cummins has an equal partnership with Daimler, which, of course, has also acquired Chrysler Corporation. That's why, when Ford offered Cummins a billion-dollar package to manfacture medium and light truck diesels for its vehicles in 2001, Cummins said no. Again, for antitrust reasons, a public holding company was set up to handle Isuzu as a separate corporate entity. The name of the company is Benz Transporation Technologies, of San Paulo, Brazil. BTT also is a major owner of the Benz division of Daimler Chrysler, which manufacturers most of the diesel engines in Europe. In the case of Allison, Cummins controls it through a series of holding companies ending with Inquardo, Ltd., the orginal Caterpillar-Cummins creation in Brazil. Cummins also controls a fair-size block of stock in GM, through the ownership of a cartel of South Korean and Thai banks and investment groups.

(14) Navistar has continued its free-fall in spite of its partnership with Ford in the light-duty diesel area. Three weeks ago, after the implications of labor troubles, a rise in basic resource costs, and the disasterous introduction of the 6.0L PSD had become clear, Navistar's financial arrangements with Citibank and Manufacturers B&T collapsed. Both banks arranged to float the company infrastructural loans if it would agree to a merger with -- are you ready for this? -- Inquardo, Ltd. As of last Thursday, Cummins owns 67% of Navistar through Inquardo.

Right now, Cummins makes all diesels in all pickup trucks sold in the United States. Cummins makes 73% of all diesels in all trucks sold in the world. The board of directors at Inquardo -- which isn't listed on any stock exchange -- includes 9 Cummins execs, 2 Caterpillar execs, and one Wells Fargo Bank exec. The CEO and CFO are also Cummins vice presidents. And there are Cummins execs on the boards of Daimler Chrysler, General Motors, Toyota, and Honda America. Ford, the holdout, has not been doing very well.

So it isn't a question of who owns Cummins. It's a question of who Cummins owns, and who's next. Could be Ford. Could be DC. Could be both. Ford Viper, anyone? Mercedes Mustang with a 6.0L Shelby Diesel and a Holset twin turbo?

And some have claimed that the new Navistar/Ford 6.0L is Cummins' revenge for the Bosch VP44"
Click to expand...

:roll: Wow.
 
Brute 23":3orw5sqs said:
I found this on another site. Not sure who did the research or what has changes since then. But it will make your head spin.
Click to expand...

Could you list the other site?

Another--the Iuszu-Subaru joint venture in Lafayette, IN is now building Toyota Camrys 50% of the time.
 
No comment MikeC.... it is your thread.
laughing6-hehe.gif
 
Brute 23":352hga0y said:
No comment MikeC.... it is your thread.
laughing6-hehe.gif
Click to expand...

I don't understand. Are you denying that the Carlyle Group did not buy "Allison"?
 
Car companies get passed around more than Britney Spears in a Hollywood bar.
 
Darn, doesn't happen to me in any bars and I ain't that fussy.

Cost is usually the reason for a big Coy sale. The're there to make a profit for shareholders, Cost Accountants check it very closely so if its losing money or not making enough they look at alternatives. The Managers who decide, based on the Accountants figures, often don't get it right.

Of course they can buy from the old firm , or they can buy from other manufacturers if the old price is hiked too much. Sometimes they can for-see a new advance coming in requiring a lot of capital input , or new labour laws or insurance making a big difference in the regions they hire staff . If you specialise in an area then you may be lucky enough to see whats coming . Written on the wall !
 
4Tfarms":eeaog568 said:
I sure would like a ford with a cummins being pushed with an allison!!!
Click to expand...

That might make me shell out enough for a new one, sounds awesome, it ought to last forever and still have paint on it plus be able to turn it around in less than 2 acres.
 

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