General Motors has announced the closure of four North American truck/SUV plants by 2010, new small car models, the production go-ahead for the Volt electric vehicle and the possible sale of its Hummer brand.


The moves were announced by CEO Rick Wagoner ahead of the automaker’s annual general meeting in Wilmington, Delaware, on Tuesday.


Signalling a shift of emphasis to fuel-efficient cars, Wagoner said the GM board had approved a next-generation compact Chevy for the US and global markets, a next generation of the popular GM Daewoo-built Chevy Aveo, and US production of a new GM Europe-designed 1.4-litre turbocharged I4 engine.


GM said the Chevy compact would be better equipped than today’s compact cars, and would set quality and safety benchmarks for the compact class. Production would begin in mid-2010 at a Lordstown, Ohio, plant, subject to final negotiations with state and local authorities.


“This car will represent the first US application of our global architecture strategy,” said Wagoner. “This strategy will pay major dividends as we leverage our extensive car product development capability in Europe, Korea, and other locations to accelerate the shift in our US product portfolio.”

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The compact will be designed by Chevrolet and, with the new engine and manual transmission, is expected to achieve a 9mpg improvement over Chevy’s current Cobalt entry in this segment. The engine will be produced in Flint, Michigan.


The redesigned Aveo is also expected to have segment-leading fuel economy when it goes on sale in the US in the second half of 2010.


GM’s board also approved funding for production of the extended-range Volt electric vehicle.


“The Chevy Volt is a go,” said Wagoner. “We believe this is the biggest step yet in our industry’s move away from our historic, virtually complete reliance on petroleum to power vehicles.”


“We intend to show a production version publicly in the very near future, and we remain focused on our target of getting the Volt into showrooms by the end of 2010,” Wagoner added.


Preliminary plans are to produce the Volt at GM’s Detroit-Hamtramck Assembly Centre, subject to successful discussions with state and local governments.


GM said it would will react to the shift in the US market by increasing production of small and midsize cars and reducing production of pickups and truck-based SUVs.


It will add a third shift in September to the Orion Assembly Centre in Michigan, which builds the hot-selling Chevy Malibu and Pontiac G6. Also in September, the company plans to add a third shift at Lordstown Car Assembly in Ohio, which builds the Chevy Cobalt and Pontiac G5.


But declines in truck sales mean that GM will eventually cease production at four truck plants.


Oshawa Truck Assembly in Canada, which builds the Chevy Silverado and GMC Sierra, will likely cease production in 2009, while Moraine, Ohio, which builds the Chevy TrailBlazer, GMC Envoy and Saab 9-7x, will end production at the end of the 2010 model run, or sooner, if demand dictates. Janesville, Wisconsin, will cease production of medium-duty trucks by the end of 2009, and of the Tahoe, Suburban and Yukon SUVs in 2010, or sooner, if market demand dictates.


Chevrolet Kodiak medium-duty truck production will also end in Toluca, Mexico, by the end of this year.


GM expects that these actions, along with the recent announcement to remove shifts at two other US truck plants (Pontiac and Flint, Michigan), will result in additional GM North America structural cost savings of over $1bn by 2010.


GM is also undertaking a “strategic review of the Hummer brand to determine its fit within the GM portfolio”.


“At this point, the company is considering all options, from a complete revamp of the product lineup to a partial or complete sale of the brand,” GM said.


“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,” said Wagoner.


“Since the first of this year, however, US economic and market conditions have become significantly more difficult,” he added. “Higher gasoline prices are changing consumer behaviour, and they are significantly affecting the US auto industry sales mix.


“These moves are all in response to the rapid rise in oil prices and the resulting changes in the US, 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 US turnaround on track and moving forward.”