Geniuses: General Motors Cuts SUV, Truck Production
by Judd WileyJune 3rd, 2008, 1:53 pm
So we learn today that the bigwigs at General Motors are closing four North American plants in a shift away from pickup trucks and SUVs towards smaller cars and passenger vehicles.
The company plans to slash 500,000 units from its overall production, and is even considering selling its Hummer brand. In three years, trucks and SUVs will likely account for 40% of GM’s North American market, down from 50% today.
Why? Rising gas prices and shifting consumer demand. According to GM chairman Rich Wagoner,
These prices are changing consumer behavior and changing it rapidly. We don’t believe it’s a spike or a temporary shift. We believe it is, by and large, permanent. …
This is tough stuff … It’s not about we like this plant better than that one. It’s about that the market has radically changed and we have to adapt to it.
Wagoner said that the GM board has approved next-generation versions of two small Chevrolet passenger cars, as well as a new fuel-efficient, turbocharged engine. GM also plans to produce an extended-range, electric-powered Chevrolet Volt, powered by batteries and a small gasoline engine, which will be available for sale no later than the end of 2010.
Let’s step back for a second and remember that GM is a Fortune 500 company with access to the best research and analysis in the country.
What took these bigwigs so long to figure out that gas-guzzlers are not the way of the future?
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