Deere and Co said it agreed withGeneral Motors Corp to discontinue negotiations on the
formation of a joint venture company to design, manufacture and
market diesel engines.
    However, the company said it will continue a marketing
arrangement with GM established in 1985 under which John Deere
diesel engines are distributed worldwide through GM's Detroit
Diesel Allison Division.
    Deere said it and GM began studying the feasibility of
forming a diesel engine joint venture in March, 1985. They
signed a memorandum of understanding to combine the diesel
engine operations of Deere and Detroit Diesel Allison in July
1986 subject to final negotiations and government clearances.
    It said the companies' exploration of the potential joint
venture made it clear there were more effective means to serve
the interests of their engine customers than by combining
manufacturing assets.
 Reuter
