DETROIT -- General Motors said on Wednesday that it has agreed to sell its money-losing locomotive unit to two U.S. equity groups, the latest asset the world's largest automaker has sold to raise cash.
Terms of the purchase of GM Electro-Motive by Rye, New York-based Greenbriar Equity Group LLC and Boston-based Berkshire Partners were not released.
A person familiar with the deal said on Tuesday the purchase price was probably under $500 million, with an agreement to give GM some of the unit's future profits if it earns more than planned.
GM Electro-Motive, which employs about 2,600 hourly and salaried workers, is the world's largest manufacturer of diesel-electric train locomotives, with operations in LaGrange, Ill., and London, Ontario.
It also builds diesel power engines for boats, oil rigs and power generators. GM does not disclose financial results for the company, which it has owned since 1930, but financial analysts said it has lost money the last few years.
The sale, expected to close in the first quarter, is contingent on completing negotiations with the UAW and the subsequent ratification by its members, GM and the two equity firms said in a statement.
"As an independent company with access to the resources of the new owners, Electro-Motive will be well positioned to continue to service its customers and grow the business," said William Happel, GM vice president and general manager of Electro-Motive.