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GM Closing Four SUV and Truck Plants, Possibly Selling Hummer

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Jun 3rd, 2008 by Liz Opsitnik

GM announced today that it is closing four truck and SUV plants in the U.S., Canada and Mexico as soaring fuel prices shift production to smaller, more fuel-efficient vehicles.

CEO Rick Wagoner said Tuesday before the automaker’s annual meeting in Delaware the plants that will close are in Oshawa, Ontario; Moraine, Ohio; Janesville, Wis.; and Toluca, Mexico.  He also said GM is considering the possible sale of its Hummer unit.

Wagoner said that a market shift to smaller vehicles will be permanent, reports Yahoo and the Associated Press.  “We at GM don’t think this is a spike or a temporary shift,” Wagoner said.

The plant closures will help GM save $1 billion per year starting in 2010.  Combined with previous cost-cutting efforts, GM will have reduced costs by $15 billion a year, Wagoner said.

In addition to shutting down these four factories, Wagoner said that GM is considering “all options” for the Hummer brand, including a possible revamp of the whole brand, or even a possible sale.

The closures will affect about 2,500 workers at each of the four plants.  These workers may get the chance to take openings created when 19,000 more U.S. hourly workers leave later this year through early retirement and buyout offers.

Wagoner said GM has no plans to manufacture any new products at these four plants in the future.

Ongoing labor disputes and strikes have been a major problem for GM, including the nearly three-month American Axle strike.  GM said the strikes will cost the company a total of $2 billion before taxes in the second quarter.

On a more positive note, Wagoner said GM’s board approved the production schedule of the Chevrolet Volt, and the plug-in electric car should be in showrooms by the end of 2010.  The Volt runs on an electric motor and has a small engine to recharge its batteries.

Also, the GM board has approved production of a new small Chevrolet car at the Lordstown, Ohio plant, in mid-2010 and the Chevy Volt electric vehicle in Detroit.  To increase production of small-sized cars, GM will construct a new plant in Lordstown, Ohio, reports FOXBusiness.


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