GM to reduce diesel engine purchases from Isuzu

Wed. June 10, 2009; Posted: 11:07 AM

TOKYO, Jun 10, 2009 (Kyodo News International - McClatchy-Tribune Information Services via COMTEX) -- ISUZY | Quote | Chart | News | PowerRating -- Isuzu Motors Ltd. will become the first Japanese company to take a direct hit from General Motors Corp.'s bankruptcy as the American automaker will cut its procurement of diesel engines from the Tokyo-based manufacturer, sources familiar with the matter said Tuesday.

The development follows GM's decision to pull the plug on medium-duty truck production, they said.

Isuzu has been supplying diesel engines to GM for the trucks from its plant in Tochigi Prefecture and a joint factory with the U.S. carmaker in Ohio. In 2008, it shipped some 2,000 and 8,000 engines to GM from the Tochigi and Ohio plants respectively.

But GM's decision to stop buying a yet-to-be-known number of diesel engines from Isuzu will have only a "small impact" on the Japanese carmaker because the joint U.S. plant now produces 70,000 engines a year, an Isuzu official said.

The embattled U.S. automaker, which filed for Chapter 11 bankruptcy proceedings on June 1, is also likely to review the procurement of medium-duty trucks Isuzu produces under the GM brand for the U.S. market, the sources said.

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