General Motors Corp. (NYSE: GM) is finally facing the reality of $4 gas. The automaker today announced is plans to close four plants and introduce smaller, more fuel-efficient cars. More importantly, the company is considering selling its gas-guzzling Hummer brand.Bloomberg News quotes GM Chief Executive Rick Wagoner as saying that the plant closings will save $1 billion and cut North American truck capacity by 700,000 vehicles. About 10,000 jobs may be cut as the result of the closures. GM's board also approved the production of a new small Chevrolet car in a plant in Ohio in 2010 and the Chevy Volt electric vehicle in Detroit, according to the Associated Press.
Wagoner's turnaround plan for GM, which was started in 2005, has hit a brick wall. Sales of pick-ups and SUVs are plunging as gas prices are rising. GM has already shifted much of its health care costs to the UAW but more needs to be done to help the automaker remain competitive.
Among the first things that GM needs to do is to put the brakes on Hummer. The gargantuan behemoths pose a danger to other drivers unfortunate enough to wind up in an accident with them. Moreover, their gas mileage is terrible, averaging 14 miles in the city and 18 on the highway, according to FuelEconomy.gov. That seems to be at odds with the company's embrace of tougher CAFE standards and its commitment to being green. In fact, the company brags that it offers more vehicles that achieve 30 mpg, more flex-fuel vehicles that can run on E85 ethanol and a two-mode hybrid system found on GM's full-sized light trucks.
Times have changed since the Hummer was first introduced.
"After 9/11, Hummers became a cocky symbol of American greatness," writes Daniel Gross on Slate.com. "Driving the biggest, baddest, least-fuel-efficient car on the planet was tantamount to giving the finger to environmentalists, Arianna Huffington, and all those who suggested that the involvement of Saudi citizens in the attacks should lead us to rethink our dependence on foreign oil."
Americans have fallen out of love with the Hummer and fallen in-love with smaller, more fuel-efficient cars such as the Toyota Prius. GM had no choice but to respond to changing consumer tastes. Too bad it did so about two years too late.
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Reader Comments (Page 2 of 2)
6-06-2008 @ 8:11AM
Pete Kusnick said...
It's not the size of the vehicle that represents crash safety, it's how it bends. Cars are built to crumble understress so that your bones don't. I may like steel 50s Buicks, but they're less safe because your body will suffer more than one that an engineer designed in our current models.
If a Hummer got 14-18 mpg I'd be surprised. A neighbor with no driving age children has his oversized house in an over indulgent Gen X neighborhood with a garage packed with kidz toyz so he can park his Escalade, H2, Jeep Wrangler, Honda whatever SUV and something I don't recognize in the driveway and out onto the street. That's a bit over zealous for someone in construction. Oh, yeah I forgot the F-250 with the shiny door openers. Most guys who drive to sites drive a rust bucket or 15 yr old Olds.
My point, GM missed it in the 70s. They just are incompetent and can't change. They used to own EDS and Hughes. Can you imagine they traded them for Hummers, Saabs and duplicate car models. I feel sorry for the poor people who will lose their jobs. Happened at Beth Steel Yard and US Steel but they're back though smaller by far and it took 20 yrs.
Hummers are just dumb. My oral surgeon's bro-in-law sells them. The guy brings down good bux no doubt and he is trying to dump his Yukon XL. And believe me he can afford it. They just don't make sense.
GM's future rides on the Volt whether you like it or not.
6-08-2008 @ 6:22PM
Harry said...
I was with my buddy who has an H3 and he got 22MPG. He does not fly down the road, he finds a good truck and does about 60 to 65 MPH. Everyone says get rid of them, but what about the JEEP! The H3 gets better mileage than the wrangler. And let's see, the Wrangler was born from the WWII Wileys. It was the best way to show we cared about the Troops. But not now, for some reason we are all warped and brainwashed into believing a Japanese car is better than American. By the way, my friend is in the Army and was on leave so don't anyone even start. He can drive anything he wants as he is putting his life on the line for us!
I was in the Army and my first vehciel at 18 was a Jeep CJ-7 I thought this was America, we can chose to drive what we want
6-08-2008 @ 6:43PM
Harry said...
Yea let's get rid of the H3s, but wait let's get rid of the Jeep Wranglers too, No wait, let's get rid of the vans and Canyons and Colorado Pick-ups...No wait, let's all just go buy YUGOs
Welcome to OPECIA
6-08-2008 @ 6:45PM
Harry said...
Welcome fellow Opecians, Welcome to Opecia! (Not American anymore).
In Opecia Opec tells you all what to drive and what to pay for gas and food! In Opecia the citizens are so brain washed they learn to hate their own (Use to be ) American made cars and put each other down for driving them. Then they (the people) love the Japanese and German vehicles (What they could not do in World War II has now been done! Oh the old Americans would not have put up with this crap, they would have thrown their tea in the harbor, but the modern Opecians are not that smart and do not know how to UNITE!
6-08-2008 @ 8:39PM
Harry said...
Yea, and let's get rid of the American way of life too Let's get rid of Football and call Soccer Football..Come on come on we are so brain washed by the media let's just get it over with!
6-11-2008 @ 12:51PM
Rick said...
I bought my hummer because it rocks! Just as people in the 60's, 70's and 80's bought muscle cars. I don't use it for my source of transportation, its the weekend getaway vehicle. I didn't drive my 69 Camaro everyday either, but ended up selling it for four times the price I bought it for.
The Hummer will be a collector's vehicle in years to come as will other gas guzzlers.
Also its FUN to drive. Try taking your ego out in the woods in a smart car!
6-12-2008 @ 8:48AM
harry said...
i like the comment-i died in a small car, but got good mpg. it is a fact that the bigger the safer. people buy big mainly for room and safety. i would rather have steel around me than plastic. dahh....
6-13-2008 @ 2:04PM
Gene Dexter said...
The larger issue is fossil fuel and how it will be depleted eventually. Anything that requires a tank of unleaded to run it... is old technology. You don't need to be an environmentalist to understand what Finite Resource means.
6-28-2008 @ 11:35PM
Steve said...
When it comes to extraneous SUVs, I'm an equal opportunity hater. If your hulk never climbs anything steeper than the parking garage ramp at the mall, I don't care who made it. You don't need it (and I'm laughing at the thought of you trying to unload it right now ... car karma at its finest.)
Thanks for driving up my fuel costs so you can look "good" at the club in your no-ground-clearance Escalade or picking little Jeremy up from soccer practice in your "my ex pays more alimony than your ex" Tahoe.
There is a special warm place in my heart for Hummer owners, though, especially when I see their sad faces shelling out a Benjamin for a full tank.
Makes me wonder ... wouldn't it have been cheaper, in the long run, just to roll up an old gym sock and stick it down the front of your pants?
6-28-2008 @ 11:35PM
Paul said...
The HUMMER is merely a GM frame and running gear with an ugly body.H2=Silverado/Sierra,H3=Colorado/Canyon.Why anyone would fawn all over the "genious" of these vehicles capabilities is beyond me.They are basically standard issue 4wds.The H1 was a special vehicle in a world of its own,being developed by AM General for the military,not bling bling posers who want to impress down at the night club and red carpet.Real 4wds go by the name of vintage Ford Broncos,Land Rovers,Scouts,CJs,Land Cruiser FJ40.Those vehicles never pretended to be anything else but rough and tumble.
6-29-2008 @ 12:15PM
Dave said...
Hey Steve,
Are you really that dumg that you think people who own cars with low gas mileage drove the price of gas up? As others have said, this is a land of choice, some can use their hard earned money to by gas, others like yourself can use your money to drive their 20mpg cars to Oregon and hug a tree. Now that really makes sense.
7-01-2008 @ 12:19PM
Steve said...
Dave, Dave, Dave ...
I'm not sure what "dumg" is, but it would be dumb -- perhaps even stupid -- to assume that anyone opposed to extraneous SUVs (meaning any SUV not purchased for off-road driving or extreme weather conditions) is a tree-hugger. I'm all for responsible domestic drilling, just as I'm for responsible transportation choices.
("Choice" being the buzzword of -- well, choice -- for the "You can have my SUV keys when you pry them from my cold dead fingers" crowd.)
No, SUV drivers aren't solely responsible for the increase in fuel costs. But they (I'm guessing you're among the "they") contribute to the problem. I'd explain the concept of "higher consumption means higher demand means higher costs," but I think that might be akin to trying to teach algebra to a Dalmatian.
But, hey, continue to exercise your right to choose inefficiency and conspicuous consumption. I'll continue to exercise my right to mock the Compensationmobiles. We're a country of choices, right?
Oh, and Harry ... get help. Seriously.
8-14-2008 @ 11:04AM
vcgh2000 said...
Back in 1978, I drove 16miles and back in a 16" April snowstorm to pick up my wife in Worcester, MA. in a 1978 two wheel drive Chevy Nova......Hummers are overrated.....But if you THINK you need one, maybe you do.