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GM Hitting The Brakes On SUV And Truck Production - Smaller Vehicles Greenlighted

June 3rd, 2008

By Nima Kapadia

With consumers clearly moving — some would say stampeding — away from gas-guzzling trucks and sport utility vehicles, General Motors plans to do the same.

The world’s largest automaker announced on Tuesday it will stop production at four U.S. factories that assemble trucks and Sport Utility Vehicles, such as the BMC Sierra and the Chevy Trail Blazer; increase production at factories focused on smaller vehicles; and conduct a “strategic review” of its gas-gobbling Hummers.

“These moves are all in response to the rapid rise in oil prices and the resulting changes in the U.S., changes that we believe are more structural than cyclical,” said Chairman and CEO Rick Wagoner in a GM press release. Translation: The party for needlessly out sized, gas hogs has not just run out of beer (or in this case, reasonably priced petrol); it’s over.

Wagoner announced the following changes at the company’s shareholder meeting:

  • The board has approved the production of the plug-in Chevy Volt vehicles, which GM says will be able to run 40 miles without using any gasoline thanks to an improved battery, and are expected to be in showrooms by 2010.
  • GM will build a new-generation compact car under the Chevy brand that will be better equipped than today’s compact cars and will feature a 1.4-liter turbocharged engine made in Flint, Mich. GM also plans to build a new-generation of the popular Chevy Aveo by 2010.
  • The company will conduct a strategic review of its Hummer division, which will either be revamped or sold. According to Fuel Economy, a 2008 Hummer costs about $4,000 to fuel annually, and generates half the mileage of hybrid vehicles. It has become emblematic of the large, expensive suburban SUV with no real rationale for its size or fuel appetite.
  • Four factories will stop production sometime in 2009 or 2010, including a full-size pick up factory in Oshawa, Canada; SUV factories located in Moraine, Ohio and Janesville, Wisc.; and a medium duty pickup factory in Toluca, Mexico. These production changes will reduce GMs output of vehicles such as the Chevy Silverado, the BMC Sierra, the Chevy TrailBlazer, Tahoe, Suburban and Yukon SUVs.
  • GM will add third shifts to a plant in Orion Township, Mich., which builds the Chevy Malibu and Pontiac G6, and a plant in Lordstown, Ohio, which builds the Chevy Cobalt and the Pontiac G5.

“While some actions, especially the capacity reductions, are very difficult, they are necessary to adjust the changing market and economic conditions and to keep GM’s U.S. turnaround on track and moving forward,” said Wagoner.

Copyright © 2008 | Distributed by Noofangle Media



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