General Motors is shutting four plants and laying off 10,000 workers following what it calls a permanent change in the U.S. market for smaller vehicles. So, four truck and SUV plants in the U.S., Canada and Mexico will be shut down by 2009. Sales are expected to be the lowest they have been in more than a decade and consumer confidence is weak.
CEO Rick Wagoner said the shift to more fuel-efficient vehicles plus high gas prices have quickened consumer retreat from trucks and SUVs. "We at GM don't think this is a spike or a temporary shift," Mr. Wagoner said at GM's annual general meeting in Delaware. He certainly has that right. While trucks and SUVs are still stinking it up across the states, it is clear that Americans are looking more than ever to fuel-efficient, practically sized vehicles. It's only smart business sense to accommodate the demand.
American automakers have been more reliant on sales of truck and SUVs than their Asian and European counterparts, and as a result, the declining sales and higher gas prices have hit the Big Three automakers harder than their competitors. GM is re-evaluating all its options, including what to do with the gas-guzzling Hummer brand. The H2 is already out with the trash, and Mr. Wagoner said it's possible that the Hummer linup could be sold.
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