GM-Isuzu Duramax Diesel Joint Venture At Risk? - Diesel Truck Forum - TheDieselGarage.com
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post #1 of 7 (permalink) Old 12-22-2009, 04:42 PM Thread Starter
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GM-Isuzu Duramax Diesel Joint Venture At Risk?

Could General Motors go it alone building Duramax diesel engines for its Heavy Duty pickups instead of with manufacturing partner Isuzu Motors, Ltd?

Isuzu President Susumu Hosoi said he's seeking talks with GM to review the companies' joint venture DMAX, Ltd. factory, where Duramax engines are produced in Morraine, Ohio, and that ending joint production “may be an option,” according to a report by Bloomberg.

Hosoi is concerned that the market for large diesel-powered trucks may not recover to levels seen earlier in the decade, when fuel prices were lower and the U.S. economy was booming.

The timing of Hosoi's comments might seem unusual but they're not wholly unexpected.

The DMAX facility escaped GM's plant closure list when the company was reorganizing under Chapter 11 bankruptcy protection during last spring and summer. Although GM decided to end production of its slow selling medium-duty trucks, its Heavy Duty Chevy Silverado and GMC Sierra pickups are set to receive a major update for the 2011 model year, including the introduction of the new 'LML' 6.6-liter Duramax V-8 diesel engine that was developed jointly with Isuzu.

The LML Duramax is compliant with tough new federal emissions regulations that take effect on Jan. 1, 2010. In 2007, GM invested $69 million in the DMAX plant to build the new engine.

Why would Isuzu consider ending the partnership now? Isuzu's value in the program may be rapidly dwindling.

Aside from substantial ownership and financial considerations -- GM owns 60% of DMAX and Isuzu the rest -- going separate ways would likely have little effect on GM's future heavy-duty diesel engines.

In 2000, Isuzu and GM started joint production of the first 6.6-liter Duramax diesel engines for GM's 2001 Heavy Duty pickups. GM teamed with Isuzu to tap Isuzu's diesel engineering strengths to help GM become a major player in HD pickups. GM's earlier 6.2-liter and 6.5-liter diesel engines were widely considered to be noncompetitive vs. Ford's Navistar-sourced Power Stroke and Chrysler's Cummins-built diesel engines.

By 2002, GM had 30 percent diesel pickup market share, up from approximately 5% in1999.

But in the middle of the decade, things started to change in the DMAX partnership. In April 2006, GM sold its 7.9% stake in Isuzu for $300 million. That sale opened up an opportunity for Toyota to acquire 5.9% of Isuzu, in a bid to bolster Toyota's diesel engine knowledge.

In June 2007, GM introduced an all-new 4.5-liter Duramax V-8 diesel engine that was slated for use in GM's light-duty pickups before falling truck sales and rising fuel prices caused GM to indefinitely postpone its arrival in March 2009.

What was notable about the so-called 'baby' Duramax -- aside from its advanced architecture and layout -- was that it was 100% designed by GM and would have been built without Isuzu's involvement. Charlie Freese and Gary Arvan, GM's senior engineers responsible for designing the 4.5-liter V-8, are two of the brightest diesel engineers on the planet and both men still work for the company.

Today, unless Isuzu helps engineer the LML's replacement, there seems to be little value for Isuzu to hang on to its share of the joint venture. GM has proven that it has the in-house knowledge to build advanced diesel engines without Isuzu's help.

"The new Duramax 6.6-liter turbodiesel (LML) is being fully engineered within GM," said GM powertrain spokesman Tom Read. "GM has an very capable diesel engineering team, with extensive resources and capability both in the U.S and globally, to handle the engineering task."

A diesel partnership breakup isn't without recent precedent. Ford and Navistar ended their 30-year diesel manufacturing relationship in January. Ford's all-new 2011 6.7-liter Power Stroke V-8 diesel was designed and engineered entirely in-house and is set to start production soon at one of Ford's engine plants in Mexico.

The ending of the DMAX partnership could be one of the final chapters in a long history of mutual cooperation between GM and Isuzu that started in 1971, when GM first invested in the Japanese company. And it could be the start of an entirely new chapter for GM's diesel powertrain program.


http://news.pickuptrucks.com/2009/12...e-at-risk.html

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post #2 of 7 (permalink) Old 12-22-2009, 05:10 PM
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Robert they may be a bit off. I'm not down-talking Pickuptrucks.com, but Isuzu has been out of DMAX since 2006. If you go to DMAX, Isuzu or GM Public Relations the information is there.

LBZ and up is all GM.

http://www.isuzu.co.jp/world/investor/fact/gm.html



http://www.isuzu.co.jp/world/investor/fact/history.html

http://en.wikipedia.org/wiki/Duramax...amax_V8_engine

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post #3 of 7 (permalink) Old 12-22-2009, 11:15 PM
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This is a quote from the link you inserted:

Update #1 Dec-22-2009 7:50 am Pacific:
Added quote from GM powertrain spokesman Tom Read. Corrected reference that the LML Duramax was jointly developed with Isuzu. GM designed and engineered the LML engine without Isuzu's assistance.

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post #4 of 7 (permalink) Old 12-23-2009, 12:16 AM
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wait so let me get this straight, the lml is built and engineered by gm. not isuzu?

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post #5 of 7 (permalink) Old 12-23-2009, 12:21 AM
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As was the LMM. I can not confirm the LBZ because I don't what month they decided on the lowered compression ratio and OS.

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post #6 of 7 (permalink) Old 12-23-2009, 03:34 AM
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DMAX is the company that produces the engine, not Isuzu, Isuzu helped in development of the LB7, and LLY, the LBZ, LMM, and LML are all pretty well GM's baby

Im not worried if Isuzu drops out, i have my LBZ anyway

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post #7 of 7 (permalink) Old 12-23-2009, 10:43 AM
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Reports like this crack me up. The fact is, when you go into a negotiation one side is going to say they don't need the other anymore. The other side is going to say they are better off without the other. It's a numbers game.

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