CENTO, Italy - DaimlerChrysler is unlikely to keep control of two automotive turbodiesel engine plants in Italy and Brazil when it acquires Detroit Diesel Corp. from Penske Corp. of the USA.
On July 21, D/C announced an offer to buy the 78.7 percent of Detroit Diesel it did not already own for $423 million. The deal includes two automotive turbodiesel operations - VM Motori SpA of Italy and Detroit Diesel Motores do. of Brazil.
Penske Corp. is Detroit Diesel's biggest shareholder with 48.6 percent of the company. It has agreed to D/C's takeover of Detroit Diesel. Penske Chairman Roger Penske and other executives will remain with Detroit Diesel.
Now D/C has offered Penske a six-month option to take back a 51 percent share of the two automotive turbodiesel operations in Italy and Brazil.
'VM Motori will remain a niche player in the turbodiesel engine business,' said Vilmo Ferioli, chief executive officer of VM Motori and Detroit Diesel's worldwide gen-eral manager for automotive diesel engines. 'Our volumes are small compared with major automakers. We cannot compete on volume. But with higher flexibility we can offer specially-tailored solutions for lower-volume vehicles - such as 10,000 units a year.'
From its Italian plant in Cento, midway between Modena and Bologna, VM Motori supplies four-cylinder diesel engines for the Chrysler Voyager and five-cylinder units for the Jeep Grand Cherokee built at D/C's Eurostar plant in Graz, Austria.
From its Brazilian plant in Curitiba, Detroit Diesel Motores supplies the Brazil-built Dodge Dakota and ships engines to Toledo, Ohio, USA, for European production of the Jeep Cherokee.
From summer 2001, VM Motori will begin supplying 2.5-liter, 16-valve, four-cylinder, direct-injection turbodiesels to Ford Motor Co.
From 1993 to 1997, VM Motori supplied Ford of Europe with 20,000 pre-chamber turbodiesels used in the Scorpio.
Ford has confirmed the VM Motori turbodiesel engine will be offered in Europe from 2002 on the Maverick, the European version of the new sport-utility also known as the Ford Escape and Mazda Tribute. The same VM Motori engine could be offered later also for the European version of the next Explorer.
By the end of the year, Hyundai Motor Co. will begin production in South Korea of a new family of small, common-rail turbodiesel engines developed by VM Motori. Between 150,000-250,000 of these 1.5-liter, three-cylinder and 2.0-liter, four-cylinder units will be made a year.
In addition, VM Motori in Italy and Detroit Diesel are developing two new common-rail V-6 engines, which could be on the market within two years.
Both engines are being designed mainly for sport-utility and light-truck applications.