GM plans shift to greener models

Automotive

General Motors Corp, reeling from record gasoline prices, has delayed plans to replace its fleet of large pickups and sport-utility vehicles and will focus on developing fuel-efficient cars.

Engineers who had been assigned to overhaul such models as the Chevrolet Tahoe SUV and Silverado pickup for 2012 are being transferred to other projects, Tom Pyden, a spokesman for Detroit-based General Motors, said. The shift is the second change this month in response to consumer demand for better mileage as gasoline tops $4 a gallon. CEO Rick Wagoner said on June 3 he will close four factories that build large SUVs and pickups by 2010.

“This is hugely significant,” said Rebecca Lindland, an analyst for Global Insight Inc in Lexington, Massachusetts. “This is a clear sign they are re-evaluating everything, because this has been the core of their bottom line for years.” Other automakers are also feeling the pinch. Ford Motor Co’s F-Series, which had outsold every car on the market monthly since 1992, was overtaken in May by four cars made by Honda Motor Co and Toyota Motor Corp, Toyota this week said it’s cutting US production of Tundra pickups for the second time in four months. “We’re going to leave all of our options open, but this is a direct result of the market conditions we are facing,” GM’s Pyden said.

 
SALES DECLINE

GM, the biggest US automaker, reported a 37% plunge in May US sales of pickups, SUVs and vans. Those vehicles, classified as light trucks, are required by US law to travel an average of 22.5 miles on a gallon of gasoline. Passenger cars must get 27.5 mpg. The automaker will continue to work on improvements to current large pickups and SUVs, primarily to make them more fuel efficient, Pyden said. GM had been studying options for the next Chevy Tahoe, GMC Sierra and other models under the code name GMT10XX. The program has been suspended indefinitely, until GM has a better sense of whether the light-truck market may recover, Pyden said. Stricter fuel-economy and pollution regulations are also forcing GM and other automakers to rethink plans for future models. Under rules passed last year, automakers must make their US fleets 40% more fuel-efficient by 2020.

GM hasn’t had an annual profit since 2004. The automaker lost $38.7 billion last year, its largest deficit ever, after writing down $39 billion of future tax benefits. The four GM plant closings will save $1 billion a year and cut North American truck-making capacity by 700,000 annually. Counting work being added at car plants, the overall reduction will be 500,000 units, Wagoner said at this month’s annual shareholders meeting. (China Daily)

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