GM To Close 4 Truck Plants, May Sell Hummer

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The New York Sun

With its May sales volume dropping about 28% amid surging fuel prices and a weak U.S. economy, General Motors Corp. said yesterday that it would close four truck plants, prepare its Hummer brand for a possible sale, and focus on making smaller cars.

The chairman of GM, Rick Wagoner, said the world’s largest automaker believed that American consumers were shifting permanently from sport utility vehicles and toward smaller vehicles. He said the company’s board had greenlighted production of a new small car in an Ohio factory and of its Volt electric vehicle — set to debut in 2010 — in Detroit.

“We at GM don’t think this is a spike or a temporary shift,” Mr. Wagoner said in a morning conference call. On Monday, the average for a gallon of regular gasoline reached $3.98 nationally.

GM said it would close plants in Oshawa, Canada; Moraine, Ohio; Janesville, Wis., and Toluca, Mexico. Several thousand jobs could be affected. Those plants are responsible for pickup truck and SUVs such as the Chevrolet Silverado, the GMC Envoy, and the medium-duty Chevy Kodiak and are expected to end production no later than the end of 2009.

For GM, pickups and SUVs have been deeply problematic for some time, but its worst division has been Hummer. Through April, Hummer was the worst-performing vehicle brand in the country, with sales down 29.6% from a year earlier, putting it below runners-up Mercury and Bentley.

“At this point, we are considering all options for the Hummer brand,” Mr. Wagoner said. “Everything from a complete revamp of the product lineup to partial or complete sale of the brand.”

No possible buyer has been named for the division, which was for a few years one of GM’s strongest. Last week, GM stock hit a 26-year low, falling to $17.38.


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