GM to Unload Allison Gas Turbines Unit : Aerospace: The sale continues an effort by the auto maker to focus on the car business.

General Motors Corp. put its Allison Gas Turbine division up for sale Thursday as part of a plan to jettison non-automobile businesses.

There have been rumors since last year that Allison, a major producer of aircraft engines, would go on the auction block. They surfaced after the troubled auto maker announced that it would revamp its operations.

“It’s too bad,” said F. Blake Wallace, Allison general manager. “I think we all really found GM to be a class employer, and it’s unfortunate, but the needs of their business and the status of their business have demanded that it be sold.”

Allison dominates the helicopter and turboprop markets and has gained ground in the military and commercial aircraft markets. Its turbine engines are also used in ships and generators.

The division employs about 7,000.

GM has begun seeking potential buyers among other gas turbine engine companies, Wallace said. Although Allison is a major military supplier, foreign ownership is a possibility, he said.

“We do have a strong technology here we think will be attractive to buyers, as well as a good product line,” Wallace said.

But the company’s search for a buyer could be hampered by the declining military market and reports that Allison failed to turn a profit last year and faces an unprofitable 1992, a union official said. GM does not reveal the profitability of its divisions.

“It’s my understanding that Allison is contacting potential buyers themselves. They haven’t told us that someone’s approached them,” said Donald Newton, chairman of the bargaining committee for United Auto Workers Local 933, which represents about 4,000 hourly workers.

Wallace said the company has invested about $1 billion in its engineering division since the mid-1980s to create new products.

Paul H. Nisbet, an aerospace analyst at Prudential Securities in New York, predicted that Allison’s selling price will range from a third to matching its annual sales.

“If they have enough commercial product to make it interesting, that certainly would be the basis for a stronger price,” he said. “The defense business is not very attractive at this point, given the winding down of so much of the defense establishment.”

Mary Anne Sudol, an automotive analyst with Fitch Investor Service in New York, said the Allison sale would be viewed as positive for GM.

“They’ll probably raise some cash that they can deploy into their new-product programs, and probably get the company more focused,” she said.

Allison Gas Turbine executives tried to negotiate their own buyout, but no agreement was reached, Wallace said.

The company told employees Thursday that it will invite potential buyers to tour its facilities in the next 60 days. Wallace said he hopes to finalize a sale between August and the end of the year.

The union had expected the announcement and had warned employees, Newton said.

“It’s still bound to be a shock and a hurt to find out the place you’ve worked for 15 to 30 years is going to be sold,” he said.

GM announced in January that it was seeking a buyer for another Indianapolis division, Allison Transmission. No buyer has been announced for that unit.