countdown to the demise of the HUMMER

GM to Shutter
Four Truck Plants
Auto Maker Also Considering Selling Hummer Brand
By JOHN D. STOLL and MIKE BARRIS
June 3, 2008 10:44 a.m.

WILMINGTON, Del. -- General Motors Corp. said Tuesday it would close four North American plants, amid a steep drop in U.S. sales of pickup trucks and sport-utility vehicles and accelerate a push to introduce smaller passenger cars.

In an effort to save about $1 billion by 2010, GM said it will cease production at an Oshawa, Ontario, truck-assembly plant, in 2009; a Moraine, Ohio, SUV plant in 2010; and a Janesville, Wis., medium-duty truck plant by the end of 2009. The closures could happen even sooner "if market demand dictates," the company said. GM also will close a Mexico medium-duty truck plant this year. (See text of GM statement.)

CEO Wagoner announced the changes at a news conference Tuesday morning.

The auto maker also launched a strategic review of its Hummer brand and reaffirmed its commitment to funding production of the Chevy Volt electric vehicle, which it aims to have in showrooms by the end of 2010.

GM said it is considering "all options" for the Hummer, "from a complete revamp of the product lineup to a partial or complete sale of the brand."

GM also said it is adding third shifts at two car plants.

Chief Executive Rick Wagoner said the moves are "all in response to the rapid rise in oil prices and the resulting changes in the U.S., changes that we believe are more structural than cyclical. 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 U.S. turnaround on track and moving forward."

Speaking with journalists, GM Chief Operating Officer Fritz Henderson said the company decided to review Hummer due to "a lot lower sales." A few weeks ago, he told investors that killing brands has proven to be an expensive endeavor. GM currently sells eight brands in the U.S., far more than its rivals.

The announcement, coinciding with the company's annual shareholder meeting here, comes ahead of GM's sales report for May, due out later Tuesday.

"From the start of our North American turnaround plan in 2005, I've said that our goal is not just to return GM to profitability, but to structure GM globally for sustained profitability and growth," Mr. Wagoner said. "Since the first of this year, however, U.S. economic and market conditions have become significantly more difficult. Higher gasoline prices are changing consumer behavior, and they are significantly affecting the U.S. auto industry sales mix."

Mr. Henderson said the company tends to think that oil prices will continue to rise. He also said that GM had been forecasting a second-half comeback for the slumping U.S. auto market in 2008, but the company is pulling that expectation off the table. The overall economy may rebound, but the U.S. housing and car markets will lag, he said.

Mr. Wagoner didn't say many jobs will definitely be affected by the plant closures, but the number could be close to 10,000 according to an initial estimate he gave.

GM is conducting a strategic review of the Hummer and will consider even selling the brand.

Sales of pickup trucks and big sport-utility vehicles -- Detroit's bread-and-butter products -- have been falling for the past few years, pulled down by the slumping economy, falling home values and rising gasoline prices. But the declines accelerated this year and showed an unexpectedly steep drop in May, as gasoline prices reached $4 a gallon in many parts of the country.

That forced GM and rival Ford Motor Co. to slash truck production in the second half of the year. Ford also gave up its goal of returning to profitability in 2009 and has begun preparing to cut 2,000 white-collar jobs.

On May 22, Ford said it would cut third-quarter production 15% to 20%, to between 510,000 and 540,000 vehicles. It also announced a fourth-quarter production cut of 2% to 8%, to 590,000 to 630,000 vehicles.

GM's market share hit a record low of 20.5% in April, according to Autodata Corp. Given the direction of truck sales, GM is likely to report a drop in May sales large enough to pull its share below 20% -- a once-unimaginable development.

Even if GM keeps its share above 20%, its declining position reflects a new competitive landscape in the U.S. In April, rival Toyota Motor Co. had U.S. market share of 17.4% -- a record for the company. May's sales totals could put Toyota within two or three percentage points of GM, with the market's trend favoring Toyota.

Toyota has already pulled even with GM in global vehicle sales. In the U.S., GM once dominated, selling half of all the new cars Americans bought. A decade ago, GM executives wore pins with the number 29, signifying their determination to hold share at 29%. In 2006, after a major overhaul of its pricing strategy, GM thought it had stabilized its share at 24%.

they should sell hummer to daihatsu, kia, or proton.

they should sell it to the arabs. they're the only ones that will be left driving around in SUVs, due to their 90 cents/gallon gas.

yeah

I wonder how long it will be before people are smuggling black market gas outa teh arabs and selling it on street corners here

About bloody time. That thing needed to die a long, long time ago.

TheWalrus wrote:About bloody time. That thing needed to die a long, long time ago.

yeah. right before the faggot ass h2

Dodge wrote:I wonder how long it will be before people are smuggling black market gas outa teh arabs and selling it on street corners here

It'll be a while. $5/gallon is not that hard to live with. Even with the higher prices in Canada I haven't yet, really, been terribly affected. You just have to change your habits.

i definitely drive less/walk more now.

Aristotle wrote:i definitely drive less/walk more now.

i thought that was cause you finally got that free spot right in front of the house, and you're affraid someone'll take it when you leave . . .

yes, well that's part of it.

i really only drive to work and trails now. we ride bikes when we need to run little errands.

i just want a motorcycle. a nice bmw tourer.

god, you could buy one, tie your ankles to it, and drive it right into the ocean.

i love you man

I don't think you'd see the total elimination of Hummer, but focusing on Hummer as a niche brand through an existing dealer network and selling the H3 and a production H4 would probably work. But as a stand alone brand, it's not going to work with gas prices as they are.

i bet GM sells it to the indians or the chinese.

Aristotle wrote:i bet GM sells it to the indians or the chinese.

A Hummer with a slot machine

haha true. the azns love to gamble.

zdc_LarryRX wrote:

Aristotle wrote:i bet GM sells it to the indians or the chinese.

A Hummer with a slot machine

I think he meant Indians with turbans, not teepees

Wookie 5.6 wrote:

zdc_LarryRX wrote:

Aristotle wrote:i bet GM sells it to the indians or the chinese.

A Hummer with a slot machine

I think he meant Indians with turbans, not teepees

haha now i get the slot machine remark

The mmm-mmm (presses in on invisible forehead dot) kind, not the wah-wah (war whoop) kind.

JaysonAych wrote:The mmm-mmm (presses in on invisible forehead dot) kind, not the wah-wah (war whoop) kind.

ugh, now i get it

Well, looks like I won't be getting a new car anytime soon.

Hey Underpants wrote:Well, looks like I won't be getting a new car anytime soon.

I feel your pain. It'll be a long, long time for me.