GM Buys the Rest of Isuzu’s Tychy Engine Plant, Poland image

GM signed a deal to buy the rest of 40% stake in Isuzu’s Tychy engine plant, located in Poland.

The Tychy plant, which manufactures the 1.7-liter diesel engines, will from now on operate as GM Powertrain Poland. GM did not offer details about how much it paid for the rest of the stake, but sad that buying the rest of the 40% stake “underlines the importance of Europe for GM.” The US automaker has bought the 60% interest in the plant in 2002.

The Tychy plant, which currently has 522 workers, started production in 1999 and has built more than 2.5 million engines. GM also owns a 60% stake in a JV with Isuzu, called DMAX, located in Moraine, Ohio, and established in 1998. The JV manufactures large diesel engines used in full-size vans and heavy-duty trucks.
At the beginning of this year GM and Isuzu announced their plans to jointly develop a next-generation pickup truck, a move which will help the companies cut costs.

“Because the cost burden is big for Isuzu to develop engines, it probably sees it necessary to cooperate with someone, though it does not need a capital tie-up,” said Kei Nihonyanagi, an autos analyst at Barclays Securities in Japan. “By being able to sell engines to GM, Isuzu would be able to recover its investment easier.”

Source: The Detroit News