GM In Retreat

General Motors Faces Facts: People Aren't Buying Enough Guzzlers

Rick Wagoner, chairman and chief executive of GM, admitted today that the era of gas guzzlers is ending. "These higher gasoline prices are changing consumer behavior and rapidly," he said . "We don't think this is a temporary spike or shift. We think it is permanent." That's too bad for GM, and a lot of its employees.

In response to the public's change of taste, GM will close four North American plants that make trucks and SUVs and employ abut 10,000 workers. It will increase production of some of its more fuel-efficient models by adding third shifts at two plants that build the Chevy Malibu, Pontiac G6, Chevy Cobalt and Pontiac G5. And it is talking up the Volt, currently in development with a market roll-out scheduled for 2010 (suggested price $30,000?).

Wagoner also said GM is considering selling its Hummer unit.

The Cost of Stubbornness

General Motors has lost more than $54 billion since 2005, according to AFP, and laid off tens of thousands of employees. Although U.S. car companies have held on as long as possible selling profitable big SUVs and light trucks, now they are being hit from two directions. Japanese and German makers are selling competitive big SUVs and pickups, and Americans are buying fewer of them at the same time.

Fuel Efficient

The Chevy Malibu and Cobalt, the cars GM hopes to sell more of because of their fuel efficiency, get 20 to 25 miles per gallon (EPA combined) and emit 6.7 to 7.6 tonnes of CO₂ annually with typical driving. That's about the same as a Toyota Camry. The Malibu hybrid gets 27 m/g, while the Camry hybrid gets 34, and emits more than a tonne less CO₂ per year.

More in this AFP item and this from CNN.