General Motors said Tuesday, June 3, that it is ending truck production at
four plants that build full-sized pickups and SUVs and is considering “all
options” with its Hummer brand, including a possible sale.
The moves are the result of high gas prices, which GM now views as permanent,
CEO Rick Wagoner said. GM is reacting to $4-a-gallon gasoline prices by making
major cuts in its full-sized pickup and SUV production.
The automaker said it will cease production at its Oshawa, Ontario, truck
assembly operations in Canada, which builds the Chevrolet Silverado and GMC
Sierra, likely in 2009.
GM said its plant in Moraine, Ohio, which builds the Chevrolet TrailBlazer,
GMC Envoy and Saab 9-7x, will end production at the end of the 2010 model run or
sooner, if demand dictates.
The plant in Janesville, Wisconsin, will cease production of medium-duty
trucks by the end of 2009 and of the Chevrolet Tahoe, Chevrolet Suburban and GMC
Yukon in 2010 or sooner.
Production of the Chevrolet Kodiak medium-duty truck will end in Toluca,
Mexico, by the end of this year.
Wagoner said each plant employs about 2,500, but it's unclear whether
employees will be transferred or laid off.
These cuts, along with the recent moves to remove shifts at U.S. truck plants
in Pontiac and Flint, Michigan, will result in annual cost savings of more than
$1 billion by 2010, Wagoner says.
“Employees of these facilities were notified this morning,” Wagoner said.
“These are difficult decisions and we’ll work with our union partners.”
The shutdowns will reduce GM’s pickup and SUV capacity by more than 700,000
units.
On the plus side, GM said it will add a third shift to the Orion, Michigan,
plant starting in September.
GM builds the Chevrolet Malibu and Pontiac G6 sedans at Orion. Also in
September, the company plans to add a third shift at Lordstown Car Assembly in
Ohio, which builds the Chevrolet Cobalt and Pontiac G5. That plant will also
build the new compact car coming to Chevrolet in 2010.
GM will begin a strategic review of its Hummer brand to determine its fit
within the GM portfolio, Wagoner says.
Presently, GM's truck-to-car mix is about 50-50. Wagoner says that within
three years, once all the changes take effect, the mix will be 60 percent cars
and 40 percent trucks.
“Once the U.S. market settles down, GM will benefit from the cost it’s taken
out and the new products it’s introducing,” Wagoner says.
Filed by Jamie Lareau of Automotive News, a sister publication of Workforce
Management. To comment, e-mail editors@workforce.com.
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