GM to close 4 plants: Era of petrol-guzzlers over
Pastor Dale Morgan
GM to close 4 plants: Era of petrol-guzzlers over*
By Mira Oberman in Chicago
June 04, 2008 08:45am
Article from: Reuters
GENERAL Motors has predicted the end of the petrol-guzzling vehicle as
it announced plans to close four North American truck and sports utility
vehicle (SUV) plants and ramp up production of new fuel-efficient vehicles.
The car maker said it was also considering revamping or even selling its
hulking Hummer brand as high fuel prices have dramatically shifted
consumer demand.
“These moves are all in response to the rapid rise in oil prices and the
resulting changes in the US, changes that we believe are more structural
than cyclical,'' said Rick Wagoner, GM chairman and chief executive.
“We at GM don't think this is a spike or temporary shift; we believe
that it is, by and large, permanent,'' Mr Wagoner said at a press
conference ahead of GM's annual shareholder meeting in Wilmington, Delaware.
The Big Three US car makers managed to sustain their profitability in
the 1980s and 1990s in the face of a steady loss of market share to
Asian competitors because of their dominance in the truck and sports
utility market.
But they were slow to match the more fuel-efficient car-based SUVs of
their competitors and have been forced to implement massive
restructuring plans in recent years in the face of multibillion-dollar
losses.
GM alone has eliminated 71,000 jobs in the United States since 2000 and
lost more than $US54 billion ($56.55bn) since 2005.
“While some of the actions, especially the capacity reductions, are very
difficult, they are necessary to adjust to changing market and economic
conditions and to keep GM's US turnaround on track and moving forward,''
Mr Wagoner said.
Mr Wagoner declined to say when GM expects to return to profitability
but said the automaker remained committed to restructuring itself ``for
sustained profitability and growth.''
“While we remain reasonably constructive on the long-term prospects for
the auto industry in the United States, we view the near-term US
economic and auto market environment with considerable caution,'' Mr
Wagoner said.