(Reuters) - U.S. automaker General Motors Co said on Wednesday it will jointly develop and assemble medium-duty commercial vehicles with truck and engine maker Navistar International Corp.
GM said on Wednesday the agreement will help boost its Chevrolet commercial truck business.
The move “strengthens Chevrolet’s providing commercial customers with more choices and one-stop shopping for a versatile lineup of trucks, vans and crossovers,” Ed Peper, GM’s U.S. vice president of fleet and commercial sales said in a statement.
The future products will be jointly developed using Navistar’s rolling chassis configurations and manufacturing capabilities, and GM commercial components and engines.
Production will begin in 2018 at Navistar’s plant in Springfield, Ohio.
Navistar said it would add 300 jobs and invest more than $12 million to upgrade the factory and equipment.
The companies did not disclose specific terms of the agreement.
The deal with GM will help Navistar “enhance our medium-duty product portfolio and leverage our scale and expertise in manufacturing medium-duty trucks,” said Bill Kozek, president of trucks and parts at Navistar.
The Lisle, Illinois-based truck maker, which was once a leading maker of truck engines, continues to try to turn itself around after making a disastrous bet on a costly and unsuccessful proprietary smog-reduction system.
The emissions-related debacle sent Navistar’s warranty expenses skyrocketing even as sales tumbled.
Earlier this month, Navistar posted its 12th consecutive quarterly loss, but executives said ongoing restructuring actions would help the company become profitable and have positive cash flow in 2016.
In early trading, Navistar shares were down 0.8 percent at $12.45. GM shares were up nearly 1.4 percent at $29.55.
Reporting by Nick Carey in Green Bay, Wisconsin and Arunima Banerjee in Bengaluru; Editing by Ted Kerr