GM and Navistar have decided not to renew the memorandum of understanding for the truck specialist to buy GM's medium duty truck business, which has expired.

The decision was "due to significant marketplace and economic changes", Navistar said in a statement without elaborating.

"GM will continue to review strategic options for the business, including continued discussions with Navistar," the truckmaker added.

GM would continue to run the medium duty business as it has in the past, the statement said.

But Reuters reported that Navistar had planned to move production away from the Flint, Michigan, plant where hundreds of United Auto Workers (UAW) union members currently assemble GM's medium-duty trucks.

That city has previously been devastated by huge GM closures which became the subject of the Michael Moore film 'Roger and Me'.

Reuters noted the talks broke down as GM struggles to restructure its operations by slashing production of slow-selling trucks and SUVs, cutting costs and boosting production of more fuel-efficient vehicles, all of which requires cooperation from the UAW.

The Flint Journal newspaper, quoting a UAW regional official, said the sale collapsed because GM was unable to keep a commitment it made to the union to bring replacement work to the truck plant once Navistar moved production out, reported the news agency.

US reports had said GM had hoped to move production of a super-heavy-duty pickup to Flint.