Wednesday, June 4, 2008
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Gwinnett Daily Post
WILMINGTON, Del. - General Motors Corp. officially blew up its old business model Tuesday, closing four pickup truck and sport utility vehicle factories, announcing a new small car that could get 45 miles per gallon and shedding 10,000 jobs.
But it remains to be seen whether the world's largest automaker by sales can sell enough cars to make money in a shrinking U.S. market and stay ahead of the bill collectors.
The automaker said it would idle pickup and SUV factories in Janesville, Wis.; Oshawa, Ontario; Moraine, Ohio; and Toluca, Mexico, as it tries to deal with a shift to smaller vehicles brought on by $4 per gallon gasoline.
GM said the truck plant cuts, which will reduce capacity to produce pickups and large SUVs by about 35 percent, will save the company $1 billion per year, and when combined with earlier measures, by 2011 will save $15 billion over 2005 costs.
GM's moves, which come after a series of restructuring measures since 2005, are the result of a huge shift in U.S. consumer preferences for small cars and crossovers during the past two months.
""We at GM don't think this is a spike or temporary shift,' Chief Executive Rick Wagoner said. ""We believe that it is, by and large, permanent.'