General Motors closes doors on 4 truck and SUV plants


GM’s plant closings will save $1 billion a year.

WILMINGTON, Del. (AP) — General Motors Corp. officially blew up its old business model Tuesday, closing four pickup truck and sport utility vehicle factories, announcing a new small car that could get 45 miles per gallon and shedding 10,000 jobs in the process.

But it remains to be seen whether the world’s largest automaker by sales can sell enough cars to make money in a shrinking U.S. market and stay ahead of the bill collectors.

The automaker said it would idle pickup and SUV factories in Janesville, Wis.; Oshawa, Ontario; Moraine, Ohio; and Toluca, Mexico, as it tries to deal with a shift to smaller vehicles brought on by $4 per gallon gasoline.

GM said the truck plant cuts, which will reduce capacity to produce pickups and large SUVs by about 35 percent, will save the company $1 billion per year, and when combined with earlier measures, by 2011 will save $15 billion over 2005 costs.

The Oshawa truck plant, which builds the Chevrolet Silverado and GMC Sierra pickups, likely will be shuttered next year. The Moraine plant near Dayton will stop making Chevy TrailBlazer and other mid-size SUVs in 2010 “or sooner if demand dictates,” Wagoner said.

In Janesville, the plant that builds medium-duty trucks and big SUVs like the Chevrolet Tahoe will cease production starting at the end of 2009, finishing in 2010 or sooner if demand stays weak. In Toluca, production of medium-duty trucks will end by the end of 2008, Wagoner said.

GM’s moves, which come after a series of restructuring measures since 2005, are the result of a huge shift in U.S. consumer preferences for small cars and crossovers during the past two months.

“We at GM don’t think this is a spike or temporary shift,” Chief Executive Rick Wagoner said. “We believe that it is, by and large, permanent.”

The automaker now will have to parlay its strong overseas sales and the lower North American costs into a profit by selling cars in the $15,000 to $20,000 range, half the price of its high-profit SUVs and pickup trucks.

GM lost $3.3 billion in the first quarter and burned through $3.4 billion in cash from January through March. Its May sales were down 28 percent compared with last May.

Just before the company’s annual shareholders’ meeting in Wilmington, Del., Wagoner also announced the automaker will build a new generation small car starting in mid-2010 at its factory in Lordstown.

Wagoner also announced that the board of directors has approved production of the Chevrolet Volt plug-in electric car, which GM plans to bring to showrooms by the end of 2010.

Fully charged, the Volt could drive about 40 miles without using any gasoline, and a small conventional engine would recharge the vehicle, extending its range and allowing it to get the equivalent of 150 miles per gallon.

Wagoner also said the iconic Hummer brand will be reviewed and potentially sold or revamped due to high fuel prices.

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