GM Closing 4 Trucks and SUV Plants, Betting More on Smaller Cars


August 2009 Update: The Chevy Volt is Rated at 230 MPG in City Driving
Americans are Driving Less, Buying Smaller cars
The plate tectonics of the transportation sector are shifting and the new landscape is starting to become clearer. The change is particularly obvious in the US where fuel prices have been relatively low compared to most of the rest of the world for a long time. But the latest stats by the Federal Highway Administration don't lie: Americans are driving less. They're also buying more compact cars and hybrids.

Big Changes at General Motors
Another big sign of this changing world is GM's announcement that it will close 4 big SUV manufacturing plants and is thinking about selling its ailing Hummer brand. The company doesn't seem to be burying its head in the sand either: "We don't believe it's a spike or a temporary shift. We believe it is, by and large, permanent," said GM chairman Rick Wagoner.

Lets hope they learned from their $51 billion loses over the past three years and are really serious... Even in China.

Over all, G.M. will reduce its North American production to 3.7 million vehicles from 4.2 million. The moves should add $1 billion in cost savings to an existing target of reducing costs by $5 billion by 2011.

A New Hope?
But GM isn't just cutting. It's also going to invest more in its passenger cars and "crossover" vehicles. One of these new passenger cars is a Chevrolet with a turbo 1.4 liter engine -- it's been a while since GM has even looked at such small displacement. We bet that if they make it available, it will sell very well.


Click the image above to see our Volt slideshow.
Chevy Volt Still Happening
Mr. Wagoner also mentioned that the plug-in series hybrid Chevy Volt would be available for sale "no later than the end of 2010." Lets hope that's true, because with a 40 miles (65 km) all-electric range, this car would be among the most fuel efficient on the market and could show other automakers that it is worth it to invest in plug-in hybrids.

Despite its mistakes and financial problems, GM is still an industrial giant and will be making a large portion of the cars sold in the future. We're pragmatic and we want to see it make cars that are as efficient as possible, and work on R&D; for plug-in hybrids and electric cars, so we'll give them credit for making a step in the right direction. Just don't stop there! Keep going.

Update: Myvolt? Voltbook? GM Launches Voltage Social Network
Update 2: What Does GM's Bankruptcy Mean for the Chevy Volt?
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Compact Cars
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More on GM Plants Shutting Down
G.M. Closing 4 Plants in Shift From Trucks Toward Cars
GM axes four SUV and truck plants

Tags: Transportation