GM says it will sell most of motors, actuators unit ITT to buy 80% stake for $400 million

September 29, 1993|By New York Times News Service

DETROIT -- On the eve of a new national labor agreement, General Motors Corp. announced yesterday the sale of 80 percent of its $760 million motors and actuators manufacturing operations to ITT, a move meant to conserve capital and eventually to curb GM's spiraling wage and benefit costs.

If the sale goes through, it would be the second big divestiture announced by General Motors in the last 11 days.

GM previously said it intended to sell five parts plants and the assets of a sixth to an investor group led by Richard E. Dauch, a former Chrysler Corp. manufacturing executive. The plants employ 6,800 workers in the manufacture of axles, steering systems and other components.

The latest sale covers an engineering center in Dayton, Ohio, a factory in Rochester, N.Y., and two factories in Mexico, all belonging to the Delco Chassis division of GM's automotive components group.

GM will retain a 20 percent interest, but ITT Corp. will have an option to purchase that share as well in three years. ITT said it was paying $400 million for its 80 percent interest and would benefit from a long-term supply agreement with GM.

Delco Chassis' motors and actuators business supplies fans, windshield wipers and small motors for automotive accessories like power antennas.

Shares of GM stock declined by 25 cents yesterday, to $45. ITT shares went up by $1.75, to $93.75.

Security analysts have generally applauded GM's divestitures, which are intended to reduce the automaker to a manageable size and free it of uncompetitive labor costs.

The No. 1 automaker has been trying to sell or shrink some of its parts operations while keeping others that are strategically vital or that have growth potential.

It has also been cutting its work force, trying to become much leaner, like its toughest foreign and domestic competitors.

ITT has been seeking to buy automotive parts operations to add to its growing automotive business, which recorded about $3.5 billion in sales in 1992.

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