June 9, 2009 at 11:32 am

GM drops medium-duty trucks, opens battery lab

Almost 400 Flint workers affected

General Motors President and CEO Fritz Henderson, left, announces a 33,000-square-foot battery lab at GM's Technical Center in Warren with Gov. Jennifer Granholm and Jim Queen, GM group vice president for global engineering. (Charles V. Tines / The Detroit News)

General Motors Corp. shed another bad asset Monday by scrapping its medium-duty truck business after a fruitless four-year search for a buyer. The move came on the day GM unveiled a new battery lab seen as key to the automaker's reinvention.

Production of the Chevy Kodiak and GMC Topkick medium-duty trucks at the Flint Assembly Plant will stop by July 31, and 398 workers will be reassigned or offered buyouts, President and CEO Fritz Henderson said.

The decision was announced one week after GM filed for Chapter 11 bankruptcy -- a week filled with moves aimed at selling or dumping unprofitable assets such as the Hummer and Saturn brands. "We're trying to move as fast as possible," Henderson said Monday.

The medium-duty truck business has been hurt by near-record fuel prices last year and a downturn in the housing market, which relies on medium-duty trucks, specifically dump trucks, cargo carriers and other work trucks.

"If you can sell it, great, but if you can't, it becomes another cash bleed," said auto analyst Jim Hall of 2953 Analytics in Birmingham. "If it's an asset that's not giving them any revenue, it's no surprise that they're stopping."

GM had negotiated with Isuzu Motors Ltd. as recently as February to reach a deal that would have kept the truck division in Flint through 2014. An earlier failed agreement with Navistar International Corp. would have relocated jobs to another factory.

The medium-duty truck line in Flint produced 22,000 vehicles last year.

Henderson spoke in Warren on the sidelines of the unveiling of a 33,000-square-foot battery lab at GM's Technical Center. The lab will aid the testing and development of automotive batteries and technologies used in plug-in, hybrid, fuel-cell and electric extended-range vehicles such as the Chevrolet Volt.

"This lab is an indication Michigan is going to be the place we intend and aspire to be, the place where these breakthroughs occur," Gov. Jennifer Granholm said.

The Global Battery Systems Lab, the country's largest, is GM's latest push to become a leader in a technology area that promises to reduce dependence on foreign oil.

It also will strengthen GM's design, development and testing abilities. GM will use the lab to test new energy storage system technologies, including lithium-ion and nickel-metal hydride batteries.

More than 1,000 engineers are working at the lab, which features test channels and thermal chambers that simulate real-world driving conditions.

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Lawmakers and other officials tour a testing area in the battery lab, ... (Charles V. Tines / The Detroit News)