General Motors (NYSE: GM) announced today that it will cease production at four plants that build pickups, SUVs and medium-duty trucks, and that it will conduct a strategic review of the Hummer brand in response to growing demand for fuel-efficient vehicles in North America.
Rick Wagoner, GM chairman and CEO, made the announcements as part of the GM annual meeting of stockholders.
"Higher gasoline prices are changing consumer behavior, and they are significantly affecting the U.S. auto industry sales mix," Wagoner said.
GM said it is considering all options for the gas-guzzling Hummers, from a complete revamp of the product lineup to a partial or complete sale of the brand.
The company also said it will react to the shift in the U.S. market by increasing production of small and midsize cars and reducing production of pickups and truck-based SUVs.
Oshawa Truck Assembly in Canada, which builds the Chevy Silverado and GMC Sierra, will likely cease production in 2009, while Moraine, Ohio, which builds the Chevy TrailBlazer, GMC Envoy and Saab 9-7x, will end production at the end of the 2010 model run, or sooner, the company said.
Janesville, Wisconsin, will cease production of medium-duty trucks by the end of 2009, and of the Tahoe, Suburban and Yukon in 2010, or sooner. Chevrolet Kodiak medium-duty truck production will also end in Toluca, Mexico, by the end of this year.
In North America, GM has been trying to revitalize its car lineup and grow its crossover business. 18 of the next 19 new GM products for the U.S. will be cars or crossovers, the company said.
The GM board has approved a next-generation compact Chevy for the U.S. and global markets to begin production in mid-2010 at GM’s Lordstown, Ohio, plant.
"This car will represent the first U.S. application of our global architecture strategy," Wagoner said. He said the care will be leveraged in Europe, Korea, and other locations to "accelerate the shift in our U.S. product portfolio."
The compact will feature the 1.4-liter turbocharged version of GM’s global four-cylinder engine. With this engine and a manual transmission, the new Chevy is expected to achieve a 9 mpg improvement over Chevy’s current entry in this segment. The engine will be produced in Flint, Michigan, subject to final negotiations with state and local authorities.
Also recently approved was a next generation of the Chevy Aveo, which the company said will have segment-leading fuel economy when it goes on sale in the U.S. market in the second half of 2010.
The Chevy Volt took a step toward the showroom with formal approval by the GM board of funding for production of the electric vehicle. The approval indicates that GM leadership believes the technology for the Volt, including its lithium-ion batteries, will be ready for volume production on schedule.
"We intend to show a production version of the Chevy Volt publicly in the very near future, and we remain focused on our target of getting the Volt into Chevrolet showrooms by the end of 2010," Wagoner said.
Preliminary plans are to produce the Volt at GM’s Detroit-Hamtramck Assembly Center.
Summing up the announcements, Wagoner said "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.
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