Detroit Diesel And Deere Plan Joint Venture To Market Broader Line Of Diesel Engines
General Motors and Deere & Company have signed a memorandum of understanding to form a joint venture to design, manufacture and distribute diesel engines worldwide, the companies announced recently. The proposed corporation would be held equally by both parent companies. The agreement is subject to final negotiations and clearance by the federal antitrust authorities.
The joint venture will include the diesel engine operations of Deere & Company and the Detroit Diesel Allison Division of General Motors (DDA).
F. James McDonald, president of General Motors, and Robert A.
Hanson, chairman and chief executive officer, Deere & Company, issued this joint statement: "General Motors and Deere & Company believe this proposed joint venture is a very positive step for the diesel engine operations of both companies.
The new organization will allow us to provide a full line of products that will benefit from combined resources in both technology and economies of scale in manufacturing.
These advantages, coupled with a strong distribution network and the considerable experience of management and production personnel from both companies, give us confidence that the new company will play a leadership role in the diesel industry." Officials predict annual sales of about $1.5 billion for the new company.
The new company is yet to be named and will be headquartered in the Detroit area. Senior management will be drawn from both GM and Deere. It is expected that the new firm will be in operation under its new name and management by January 1,1987.
The joint venture will utilize diesel engine facilities in the Detroit area presently operated by Detroit Diesel Allison Division of General Motors. These include the Redford heavy-duty diesel engine plant, the Romulus Parts Distribution Center and the Romulus Engineering Center.
Also included will be the tools and machinery used to manufacture the Detroit Diesel 8.2L medium-duty engines now being built by GM's Chevrolet-Pontiac-GM of Canada (CPC) group which recently acquired DDA's Romulus diesel engine manufacturing facility. The 8.2L engine will be a part of the new joint venture's line.
The Deere & Company facilities to be utilized include the Waterloo, Iowa, diesel engine plant and a diesel engine plant in Saran, France.
Engines will also be provided from the Dubuque, Iowa, factory, which will continue to be part of Deere & Company. These three facilities supply engines for John Deere agricultural and industrial equipment as well as for use by other customers in marine and industrial applications and generator sets.
All other DDA operations will remain with GM, and other operations of Deere & Company will be unaffected.
The combined product line gives the new company a complete range of diesel engines from 50 hp to 2,000 hp, with a wide variety of configurations to meet virtually every application need.
Detroit Diesel Allison has been marketing the John Deere line of diesel engines through its worldwide sales organization for the past year, under an earlier agreement. The two companies also have been cooperating under a technical agreement for joint engineering efforts on new products. These actions have provided continuity and direction while the joint venture has been under study.
For further information, including free color literature on the full line of diesels manufactured by Detroit Diesel Allison, Circle 35 on Reader Service Card For free copies of color literature offered by John Deere on their line of diesel engines, Circle 36 on Reader Service Card
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