General Motors CEO, Richard Wagoner, announced today that the company will shut down four North American plants in a move designed to shift production away from pickups and SUVs, toward smaller, more fuel-efficient vehicles. Wagoner said that the plan comes in response to a rapid change in consumer behavior tied to rising fuel costs, a trend that he did not expect to reverse soon.
GM’s overall production capacity will drop by 500,000 vehicles, with cuts of 700,000 trucks to be supplanted by a 200,000 unit increase in more fuel-efficient cars. The centerpiece of the move towards fuel efficiency is the Chevy Volt, an extended-range plug-in automobile that Wagoner assured the public was still on schedule for a 2010 release. “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,” he said.
For years, critics and shareholders have blasted GM for a failure to adapt to rising fuel costs and growing consumer demand for more environmentally responsible vehicles. To date, GM has sold only a few thousand hybrid vehicles, while sales of the Toyota Prius recently passed the one million mark. Today’s announcement leaves no doubt that GM has received the message, with the company even considering the sale of its notorious Hummer brand. Investors responded this morning by pushing share prices up nearly 3 percent on the news.