Due to the slowing market for trucks and sport utility vehicles, General Motors has announced the shuttering of four assembly plants that build Chevy and GMC trucks. GM's leadership believes the trend toward smaller cars is not temporary, and is planning accordingly -- some would argue this planning is rather belated. Permanently closing these plants would lead to a significant production capacity reduction for GM, but it would also force more than 10,000 employees to find a new way to make a living. Most of those workers would be allowed to fill the gap made at other plants where 19,000 hourly workers took GM up on the recent round of buyouts. Also affected will be suppliers and other companies that support operations at the GM plants, making the actual toll of the cuts much higher. The four GM plants slated for closure are located in Wisconsin, Ohio, Canada, and Mexico.
In addition to reducing manufacturing capacity, GM said it will begin examining the possibility of revamping, killing, or selling the Hummer brand. Not so many years ago, the Hummer was king of the road and riding high on the wave of interest created by Operation: Desert Storm. Unfortunately for GM and Hummer, the crown tarnished quickly. The over-sized Hummer became the "poster truck" for nearly everything that is wrong with the domestic automobile industry and an easy target for environmentalist demanding change from Detroit. It all comes down to sales -- or the lack of them. At the end of May, Hummer sales were down 30 percent in comparison to the same period last year. This is a dramatic decline, but not completely out of line with the lagging sales being experienced across the board in the truck and large-SUV segments.
