GM to Close 4 Plants

Will launch new green models

GM announced on June 3 that is will close the Oshawa Truck Assembly in Canada, which builds the Chevy Silverado and GMC Sierra, in 2009. The Moraine, Ohio plant, 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. The Janesville, Wisc. plant will cease production of medium-duty trucks by the end of 2009, and of the Tahoe, Suburban and Yukon in 2010, or sooner, if market demand dictates and the Chevrolet Kodiak medium-duty truck production will also end in Toluca, Mexico, by the end of this year.

The company said that these actions, along with the recent announcement to remove shifts at two other U.S. truck plants (Pontiac and Flint, Mich.), will result in an additional GM North America structural cost savings of more than $1 billion by 2010. This is on top of the approximately $5 billion running rate reduction by 2011 that the company announced earlier this year, and also in addition to the $9 billion reduction accomplished over the 2006-07 period in North America.

GM said it work closely with its union partners to mitigate the impact of these difficult actions, which are made necessary by long-term changes in consumer demand for trucks and SUVs.

At the annual stockholders meeting Rick Wagoner, GM chairman and CEO, announced the following initiatives:

  • A new global compact car program for Chevrolet, a next generation for the popular Chevy Aveo, and a high efficiency engine module for the U.S. market.
  • Funding for production of the Chevy Volt extended-range electric vehicle.
  • Addition of third shifts to Lordstown and Orion, which build hot-selling Chevy and Pontiac cars.
  • Cessation of production at four plants that build pickups, SUVs and medium-duty trucks.
  • A strategic review of the Hummer brand.

"Since the first of this year, however, U.S. economic and market conditions have become significantly more difficult," he said. "Higher gasoline prices are changing consumer behavior, and they are significantly affecting the U.S. auto industry sales mix."

The GM board also approved a next-generation compact Chevy for the U.S. and global markets, a next generation of the popular Chevy Aveo, and a U.S. production module of GM's 1.4-liter turbocharged four-cylinder engine.

The new Chevy compact will start production in the mid-2010 at GM's Lordstown, Ohio, plant. The engine will be produced in Flint, Mich.

"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." Preliminary plans are to produce the Volt at GM's Detroit-Hamtramck Assembly Center.

GM will react to the shift in the U.S. 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 Center in Mich., 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.

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