GM Announces SUV Plant Closing

Jean Jennings of Automobile Magazine discusses General Motors' decision to close four of its North American truck and SUV plants due to rising gas prices. Jennings predicts Hummers may "seriously" be on the chopping block.

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MADELEINE BRAND, host:

This is Day to Day. I'm Madeleine Brand.

ALEX CHADWICK, host:

And I'm Alex Chadwick. Coming up you think our gas prices are bad. Wait 'til you hear from drivers in Britain.

BRAND: High gas prices. That is the main reason GM gave for closing four of its assembly plants, plants that make big trucks and SUVs. Some 10,000 workers could lose their jobs over the next few years. Chief executive Rick Wagoner says this is a response to a quote, "permanent shift by Americans who are buying fewer gas guzzlers." Even the Hummer could be on the chopping block. Joining me now to talk about this is Jean Jennings. She's the president and editor in chief of Automobile Magazine. Jean, this seems to be pretty big news that Rick Wagoner is saying it's a permanent shift away from SUV's and big trucks.

Ms. JEAN JENNINGS (President and Editor in Chief, Automobile Magazine): It's pretty huge news considering that's bread and butter vehicle, or was bread and butter vehicle for so many years for the Detroit carmakers.

BRAND: So what does this mean? That this is the end for these kinds of automobiles?

Ms. JENNINGS: No, it doesn't mean it's the end. It means that there will be purpose-built vehicles, there are still contractors out there who need pick-up trucks and they will still build these vehicles, it just cuts out the dilatants. You'll no longer see 400,000 pick-up trucks sold in a year. And it means that we will see small trucks, smaller more fuel-efficient crossover vehicles. It won't be the end of vehicles that will hold six or seven or eight people, it won't be the end of vehicles that will be able to pull boats or trailers or carry loads, it just means you'll just see more fuel efficient and smaller versions of those vehicles.

BRAND: So what will we not be seeing anymore? Which brands are going away forever?

Ms. JENNINGS: I would expect that Hummer is really seriously on the block because there is no reason for that vehicle. It is a toy and in relative terms they use a lot of gas. I would hate to just predict the demise of actual brands, but there is no doubt that the price of fuel is going to stay high once China turned from an oil exporting to an oil importing nation. That was our signal that the third world was ready to start using fossil fuels. That party's over it is just over. So we are now in a rush to create more fuel-efficient vehicles, to use more alternative technologies, and this year we will see a humongous jump in small passenger car vehicles being sold instead of trucks and SUVs.

BRAND: Well how quickly can GM make this turnaround?

Ms. JENNINGS: Well you know they're on the move. I mean, they can make the move very quickly because they have consolidated their manufacturing plant around the world so that they're all operating on the same wavelength. They can jump right now and get small vehicles from Korea, they can get small vehicles from Europe, they can have any one of their manufacturing and design bases from around the world and bring in vehicles.

BRAND: I noticed that you're saying that these vehicles would be brought in, not made here.

Ms. JENNIGS: Well, you know, General Motors is a worldwide company and while they're shutting plants here they can very quickly - what I'm talking about is response time. You know you can't design, engineer and tool up a vehicle overnight. To me, quite frankly, the overnight demand of Americans, this is typical of us, when gas was a dollar a gallon, which by the way was just a couple of years ago, people wanted big giant vehicles and they wanted them right now. This is an unprecedented time when fuel economy is the number one buying consideration. Not design, not quality, not resale value, fuel economy is number one and people are insane. And GM can probably deliver those small cars I would think in very quick order by 2010, which is just around the corner. Meanwhile, they have a lot of cars right now that deliver 30 miles per gallon or more. Their biggest problem is recovering now from the strikes that have shut down some of the factories that build those popular vehicles. So they have to get those back up and running.

BRAND: Jean Jennings editor of Automobile Magazine. We've been talking about GM's announcement today that it plans to shut down four plants that make bit SUVs and trucks in response to rising gas prices. Thanks, Jean.

Ms. JENNINGS: Thank you, Madeleine.

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