General Motors plans to close four plants and dramatically cut production of pickup trucks and large sport utility vehicles over the next two years, a move that will leave GM's Arlington facility the only one still producing full-size sport utility vehicles.
GM Chief Executive Rick Wagoner announced a series of planned changes Tuesday morning as the company seeks to cope with rapid shifts in consumer demand from trucks to cars because of rising fuel prices.
Over the next two years GM will close its other primary large SUV assembly plant in Janesville, Wisc. and pickup and SUV manufacturing facilities in Oshawa, Ontario; Moraine, Ohio; and Toluca, Mexico.
Wagoner said GM will also conduct a "strategic review" of its Hummer brand that could lead to a sale of that product line or even a cessation in production if consumer demand for the beefy truck-SUV lineup deteriorates further.
Wagoner said sales of full-size SUVs like those built in Arlington and Janesville have plummeted in recent months as gasoline prices have soared from less than $3 a gallon to near $4 a gallon, and even more in some locations.
Sales of GM trucks and SUVs have dropped from about 105,000 units a month in the January-March time frame to 65,000 a month in April-June, Wagoner said. "A disproportionate amount of that shift" has been in large SUVs, Wagoner added.
The Arlington plant builds or has the capability to build GMs entire lineup of large SUVS, including the Chevy Tahoe, GMC Yukon and Cadillac Escalade and hybrid versions of each of those. It also can produce the larger models, such as the Chevy Suburban.
The Arlington plant, which employs about 2,400 hourly and 300 salaried workers, was closed for two weeks in April as GM sought to cut inventories of unsold SUVs and worked only one shift each of the first two weeks of May. It is currently expected to work two shifts a day until the typical break at the end of June.
The plant can build about 1,000 vehicles a day in two 8-hour shifts. Janesville, which has similar production capacity, is now working one shift a day. Wagoner said it would likely continue producing at one shift a day until 2010, unless SUV sales deteriorate further.
Wagoner said GM would shift resources to car manufacturing plants including producing a new small, fuel efficient vehicle at its Lordstown, Ohio, plant.