"We are making a number of important announcements today, covering everything from product and technology investments to capacity adjustments to a strategic review of our Hummer brand," GM CEO Rick Wagoner told shareholders today. "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.
Specific programs include the introduction of a new global compact car for Chevrolet, a next-generation Chevrolet Aveo, a high efficiency engine module for the U.S. market, addition of third shifts to the Lordstown and Orion plants, and ceased production at four plants that build pickups, SUVs and medium-duty trucks.
The production cuts will see the Oshawa, Ontario, truck assembly operations in Canada, which builds the Chevrolet Silverado and GMC Sierra, cease in 2009. The plant in Moraine, Ohio, which builds the Chevrolet TrailBlazer, GMC Envoy and Saab 9-7x, will end production at the end of the 2010 model run, or sooner, if demand dictates.
Janesville, Wisc., will cease production of medium-duty trucks by the end of 2009, and the Chevrolet Tahoe, Chevrolet Suburban and GMC Yukon in 2010. Finally, Chevrolet Kodiak medium-duty truck production will also end in Toluca, Mexico, by the end of this year. Wagoner said each facility employs about 2,500 people, but it's unclear if employees will be transferred or laid off.
The new compact Chevrolet will represent the first U.S. application of GM’s global architecture strategy and will enter production in 2010 at the Lordstown, Ohio, plant. The car will be powered by a new 1.4L turbocharged four-cylinder engine that will also be produced in the U.S.
The final specifications for the Chevrolet Volt plug-in hybrid have also been given the green light and are expected to be in showrooms by the end of 2010.
Finally, GM is undertaking a strategic review of the Hummer brand to determine its fit within the carmaker’s 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.