GM closes 4 North American plants in shift from trucks toward cars
June 3, 2008
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Responding to a consumer shift toward more fuel-efficient vehicles, General Motors said Tuesday that it would stop making pickup trucks and big sport utility vehicles at four North American assembly plants and would consider selling its Hummer brand.
The moves, announced Tuesday by the company chairman and chief executive, Rick Wagoner, will slash 500,000 units from the automaker’s overall production, and pave the way for increased investment in smaller cars and passenger vehicles.
Wagoner said that rising gasoline prices had forced a “structural shift” by U.S. consumers away from truck-based vehicles built by GM.
“These prices are changing consumer behavior and changing it rapidly,” Wagoner said at a briefing before GM’s annual meeting in Wilmington, Delaware. The actions follow previous moves to cut shifts at two truck plants in Michigan.
Detroit automakers have been hit hard by rising fuel costs, which have significantly curtailed demand for pickups and full-size sport utility vehicles like the Chevrolet Tahoe. GM was expected to slash its truck production after similar moves were announced by the Ford, which recently eliminated a shift at each of four truck plants in Michigan, Wisconsin and Ontario, and extended the summer shutdown at several truck plants to reduce inventories. While GM’s production cuts were deeper than anticipated by industry analysts, the decision on the Hummer brand underscored the challenge GM was facing.
Once considered a brand with global market potential, the Hummer has become a symbol of the decline of the large, gas-guzzling sport utility vehicle.
Besides cutting production of trucks and sport utility vehicles, GM will place a bigger bet on its passenger cars and lighter-weight crossover vehicles.
Wagoner said GM would add third shifts to its plants in Lordstown, Ohio, and Orion Township, Michigan, to increase their output of Chevrolet and Pontiac cars.
The automaker also set a firm schedule for production of the extended-range, electric-powered Chevrolet Volt. “Higher gasoline prices are changing consumer behavior, and they are significantly affecting the U.S. auto industry sales mix.”
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