SAO PAULO, BRAZIL – The board of directors of General Motors Brazil and MWM International Motores, an affiliate of Navistar Inc., have signed a strategic agreement to manufacture 420,000 units of a completely new diesel engine to serve GM’s new vehicle line to be launched by 2011. The engines will be supplied for GM in Brazil and the vehicles will also serve export markets, according to www.businesswire.com.

The directors for both companies recently signed the seven-year engine supply contract at GM headquarters in São Caetano do Sul, São Paulo, Brazil. Considering the current conditions of the global vehicle market, both companies estimate that volumes can reach 60,000 units per year. This represents the largest contract between GM and a supplier in Brazil.

Waldey Sanchez, president and CEO of MWM International Motores, said that for the production of the new 2.8L, four-cylinder diesel engine to GM, the company will dedicate investments equivalent to US$ 80 million in its plants in Canoas, Rio Grande du Sul, Brazil; Santo Amaro, São Paulo, Brazil; and Jesus Maria, Argentina; and will generate 400 new direct jobs.

MWM International will be responsible for the new diesel engine machining and assembly, as it does for the Sprint 4.07 TCE engine it supplies for Chevrolet S10 pick-ups and Blazer SUVs in Brazil.