GM to stand behind medium-duty dealers, customers

GM is, in essence, still in the medium-duty truck business. That’s the message according to Mark Karney, marketing director for General Motors’ medium-duty trucks. Although GM ceased production of its medium-duty Kodiak and TopKick models in July as a response to the company’s recession-spurred bankruptcy proceedings and subsequent restructuring efforts, Karney stresses that both GMC Truck and Chevrolet will remain dedicated to servicing and supporting its medium-duty products for the foreseeable future.

“We have a strong dealer network that has been selling and servicing medium-duty trucks for years, and that network is still intact,” Karney notes. “Our customers have the peace of mind of knowing those dealers are there through our wind-down period that goes through mid-October 2010, and we are in the early stages of developing a service agreement that will provide further peace of mind for our customers beyond that date. And even though we’re not manufacturing medium-duty vehicles currently, we still have over 6,000 trucks in stock that are fully backed by General Motors and our warranty provisions and fully supported by our strong dealer network that is out there. Our customers need to understand that they have our assurance that they will be able to get parts, service and support for the trucks they purchase for the life of that vehicle.”

Although General Motors won’t offer indefinite parts and service support, Karney says the company typically provides parts availability for up to 10 years on parts even for models and products that are exiting a given market. “That’s kind of our unwritten policy,” he adds. “And we’ve communicated that intention to our dealers. We will do our best to secure parts for our trucks for as long as we possibly can, while acknowledging that some of those parts come from outside vendors and suppliers. But we are preparing ourselves to stand behind the vehicles and stand behind our dealers who will be needed to service the trucks that are still being sold now and for the next year-and-a-half, through October 2010. And when we sell trucks even in October 2010, they will still going to eligible for their warranty coverage, and we will be there to back those trucks.”

As to the future of the Kodiak and TopKick brands and whether or not they will reappear in the medium-duty market in the future, Karney isn’t sure. “I haven’t been involved in any negotiations that have been going on,” he says. “I do know there are outside parties that have expressed interest in the assets of the plants and the intellectual property behind the trucks themselves. We have a lot of brand equity built up in those two models, and we’re going to try and preserve and protect that to the best of our ability going forward. It all depends on the level of interest from the outside stakeholders that are interested in the assets. Our medium-duty line was a good fit for our business and rounded out our portfolio and gave a broader range of trucks to our customers who wanted to purchase from GM. But unfortunately, because of business conditions and our volumes and upcoming regulations, the business case for staying in the medium-duty market just didn’t hold water for GM anymore. We just couldn’t make it work.”

Asked if a revamped financially-secure GM one day might return to manufacturing medium-duty vocational trucks, Karney noted that although such a scenario currently was not possible, anything could happen in the future. “Again,” he says, “there are still possibilities in the future for our manufacturing facilities and the expertise we have in this market that others may want to tap into. So there is always the potential that some type of relationship could pop up down the road that leverages GM’s expertise in this market.”

On a positive note, Karney says he is beginning to see sounds that the economy is beginning to rebound. “We are seeing quite a bit of light at the end of the tunnel now, not just because of the CARS – ‘Cash for Clunkers’ – program, but we’re starting to see some effects of the stimulus spending and an uptick in sales volumes for pickups and medium-duty trucks,” he notes. “And we’re getting some anecdotal comments from our customers and our dealers that the light at the end of the tunnel is getting stronger and everybody seems to think that we’re through the worst of the downturn. Our sales have been at a fairly constant level for the past couple of months versus the downward trend they had been on. So we’re all optimistic and feeling things are turning around.”