GM selling Allison Transmission to Carlyle-Onex combine for $5.6 billion

Our Corporate Bureau
29 June 2007

The sale would include almost all of the Allison Transmission's assets, including seven manufacturing plants in Indianapolis and the unit's worldwide distribution network. The sale, however, will not include a Baltimore factory that builds hybrid-electric transmissions, Detroit-based GM said in a statement.

Allison makes transmissions for commercial trucks, buses and military vehicles.

GM, the largest US automaker, agreed to the sale to raise cash to finance its job cuts and plantshut downs negotiated with the UAW as part of its restructuring. The sale will add to the $16 billion kitty generated in the past two years as CEO Rick Wagoner sold assets, trimmed jobs and shut factories.

GM had $12.4 billion in losses the past two years and has been raising cash to pay for operations.

Allison last year had sales of about $2.2 billion and an operating profit of $338 million.

The unit, based in Indianapolis, makes transmissions for school buses and fire trucks, employs about 3,400 people and has seven factories in the Indiana city. GM said in January that it might be sold.