Chevy Volt | GM Closes 4 North American Plants In Shift From Trucks Toward Cars

DETROIT: 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. "We don't believe it's a spike or a temporary shift; we believe it is, by and large, permanent."

In what he called difficult decisions, Wagoner said that GM would close plants in Janesville, Wisconsin; Moraine, Ohio; Oshawa, Ontario; and Toluca, Mexico, by or before 2010.

The actions follow previous moves to cut shifts at two truck plants in Michigan.

Wagoner said it was unlikely that the plants would reopen at any point with new products, but declined to provide details about relocating workers to other facilities.

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. The shift toward smaller and lighter vehicles with better mileage is a problem for the companies, because they offer fewer such models than Asian carmakers like Toyota and Honda.

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. The company also announced last week that it would build its new subcompact car, the Fiesta, at a Mexican factory that assembles full-size pickup trucks.

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.

Wagoner said that GM's directors had approved a "strategic review" of Hummer that could include "a partial or complete sale of the brand."

Over all, GM will reduce its North American production to 3.7 million vehicles from 4.2 million. The moves should add $1 billion in cost cuts to the $5 billion it hopes to save by 2011.