General Motors announced at its annual stockholders meeting that the company will close four plants in North America that produce pickups, SUVs and light- and medium-duty trucks.
According to the company, Oshawa Truck Assembly in Oshawa, Canada, which manufactures the Chevy Silverado and GMC Sierra, will most likely cease production next year. The plant in Moraine, OH—which builds the Chevy TrailBlazer, GMC Envoy and Saab 9-7x--will end production at the end of the 2010 model run, at the latest, the company said.
The company’s Janesville, WI plant will cease production of light-duty trucks by the end of next year and of the Tahoe, Suburban and Yukon in 2010, if not earlier, GM said. Its Toluca, Mexico facility will end production on medium-duty trucks by the end of this year.
GM announced in April that it would remove shifts at its Janesville and Oshawa facilities, as well as the Pontiac assembly plant in Pontiac, MI and the Flint assembly plant in Flint, MI.
"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 Rick Wagoner, GM chairman & CEO. "Since the first of this year, however, U.S. economic and market conditions have become significantly more difficult. Higher gasoline prices are changing consumer behavior, and they are significantly affecting the U.S. auto industry sales mix."
“The Big Three have become more heavily reliant on light-duty trucks and SUVs, and they’re getting hit harder than other automakers because of high gas prices,” analyst Chris Brady, president of Commercial Motor Vehicle Consulting (CMVC), told FleetOwner.
Brady added that it will be difficult for auto parts delivery and car carriers that worked with the plants. “It’s a hard business for anyone shipping parts into these plants, and they probably will have trouble finding capacity for the lost volume. For parts carriers, a lot of other products can be hauled, but for car carriers, it’s not like you can haul anything else.”
According to Wagoner, GM will focus more on fuel-efficient cars going forward, including a compact Chevy for the U.S. and global markets and a new generation of the Chevy Aveo.
"These moves are all in response to the rapid rise in oil prices and the resulting changes in the U.S., changes that we believe are more structural than cyclical,” said Wagoner. "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 U.S. turnaround on track and moving forward."
GM also announced its board of funding has approved production of the Chevy Volt, a plug-in hybrid electric vehicle (PHEV), which the company said should be available by the end of 2010.