GM's Hard Turn

June 3, 2008
0806 01z+2003 Hummer H2+front Three Quarters View At Factory
GM is swerving away from trucks and SUVs, its long-time profit mainstays, and toward small cars; it also may sell its Hummer division. High energy prices have altered the U.S auto market, and chairman Rick Wagoner characterizes the changes as "long-term and permanent."
Wagoner's statement is to date the most dramatic public reaction among major automakers to the sudden tectonic shift in the U.S. new-car market brought on by $4-per-gallon gasoline.
Some of the moves were expected, but others were a surprise. Among the news items:
- Four plants that build trucks and/or SUVs will close: Oshawa, Ontario (full-size pickups, 2009); Moraine, Ohio (Chevy TrailBlazer/GMC Envoy/Saab 9-7X, at the end of the '10 model year, or possibly sooner); Janesville, Wisconsin (medium-duty trucks and full-size SUVs by 2010); Toluca, Mexico (the medium-duty truck line, by the end of 2008). With previously announced cuts, GM is removing a total of 700,000 units of truck production capacity.
- The Hummer brand will undergo a "strategic review," to decide whether the Hummer lineup should be completely revamped or if the division should be sold.
- Funding has been approved to produce the Chevy Volt plug-in hybrid, tentatively scheduled for assembly at GM's Hamtramck, Michigan, assembly plant and due on the market by the end of 2010. "The technical goals of the Volt are achievable within the timetable already stated," said Wagoner. He confirmed that the production version will be shown "in the very near future." We expect that will be at January's Detroit auto show, if not sooner, possibly in conjunction with GM's 100th-anniversary celebrations this fall.
- The next generation of GM's compact cars (Chevy Cobalt and the like) will use a global architecture and a 1.4-liter turbocharged engine and will get 9 mpg more than today's cars. The new compacts are due in 2010. Meanwhile, the company is increasing production of the current cars.
- The subcompact Chevy Aveo will be replaced in 2010, and it, too, will use a global architecture.
- GM will have 8 hybrids on the market by the end of this year, and 20 on sale by 2012.


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