General Motors (GM) first proposed taking a controlling stake of more than one-third in Isuzu Motors, an investment worth some $3 billion, but is now seeking a smaller holding after the specialist Japanese truckmaker said it wanted to remain independent. GM is seen as eager to tap Isuzu’s strength in Southeast Asian markets and its diesel technology, and a deal would in many ways be a foray back to well traveled ground as the two companies were once equity partners for 35 years. The U.S. automaker at one point owned as much as 49 percent in Isuzu before selling the holding down, disappointed by Isuzu losses at the time and later strapped for cash of its own. Its last remaining 7.9 percent stake was sold in 2006 for $300 million.
Since emerging from its government-funded bankruptcy restructuring in 2009, GM has begun to forge some new alliances in efforts spearheaded by GM Vice Chairman Steve Girsky. Last August, Girsky negotiated a tie-up with Korean conglomerate LG Corp to develop electric cars together.
The re-emergence of GM as a strategic partner would help Isuzu share the burden of developing hybrid and other technologies as environmental regulations around the world tighten. The two firms also still cooperate in sales in Latin America and South Africa. A stake of 33.4 percent in Japan gives the shareholder veto powers over boardroom decisions and would be worth about $3.2 billion at Isuzu’s current share price. The Nikkei business daily has said that GM is seeking a holding of about 10 percent.
