Isuzu Denies Seeking GM Exit from Joint Diesel ops

Posted 08 November 2006 @ 09:26 am EET     Print     Reprint     E-Mail     Comments

TOKYO (AP) - Japanese truck maker Isuzu Motors Ltd. denied on Wednesday that it would ask General Motors Corp. to pull out of two joint ventures that produce diesel engines and replace the U.S. auto maker with new partner Toyota Motor Corp.

"There is no discussion about this," Isuzu spokesman Kouitsu Mabuchi said.

The Nihon Keizai Shimbun business daily reported on Wednesday that Isuzu would ask former top shareholder GM to sell the 60 percent stakes it holds in Ohio-based venture DMAX Ltd. and Isuzu Motors Polska Sp. in Poland.

Toyota, which announced plans a day earlier to buy 5.9 percent of Isuzu as part of a broad tie-up to develop advanced diesel engines, would buy the entire portions held by GM for tens of billions of yen, the paper said, without citing sources.

Toyota also denied the report.

The paper said Isuzu President Yoshinori Ida would propose the plan to GM Chief Executive Rick Wagoner in a meeting in Tokyo on Wednesday. Toyota President Katsuaki Watanabe is also set to meet Wagoner separately to discuss the plan, it said.

The restructuring U.S. auto giant in April dissolved its 35-year equity alliance with Isuzu to raise cash, but said their relationship would remain intact at the operational level.

Ida and Wagoner met on Wednesday as scheduled months in advance, Isuzu said, adding they confirmed their partnership would continue as planned.

The joint ventures in Moraine, Ohio, and Tychy, Poland, are crucial for GM. The 6.6-liter V8 diesel engines produced at DMAX are mounted on the Chevrolet Silverado and GMC Sierra full-sized pickup trucks, while the 1.7-liter engines in Poland fuel several cars under its Opel brand.

The Japanese daily said Toyota and Isuzu would continue to supply GM from the ventures for the time being, but added that Japan's top auto maker was looking to utilise the plants in future as U.S. and European demand for diesel vehicles expands.