General Motors Corp. said Tuesday it would close four North American plants, amid a steep drop in U.S. sales of pickup trucks and sport-utility vehicles as fuel prices continue to soar, increasing investment in smaller cars and passenger vehicles.
In a bid to save the auto-maker $1 billion by 2010, GM said it will close production at an Oshawa, Ontario, truck-assembly plant, in 2009; a Moraine, Ohio, SUV plant in 2010; and a Janesville, Wis., medium-duty truck plant by the end of next year, if market demand dictates. CEO Rick Wagoner lso said the iconic Hummer brand will be reviewed and potentially sold or revamped.
Wagoner said that rising gasoline prices had forced a structural shift by American consumers away from truck-based vehicles built by the company. He said a market shift to smaller vehicles is permanent.
Speaking at the annual meeting of stockholders, Wagoner said the company is planning a new global compact car program for Chevrolet, a next generation Chevy Aveo and a high-efficiency engine module for the U.S. market.
From the start of our North American turnaround plan in 2005, I've said that our goal is not just to return GM to profitability, but to structure GM globally for sustained profitability and growth, Wagoner said in prepared remarks.
Since the first of this year, however, U.S. economic and market conditions have become significantly more difficult. Higher gasoline prices are changing consumer behavior, and they are significantly affecting the U.S. auto industry sales mix.
Shares of GM were gaining 1.8 percent to $17.76 in early trading.