GM closes plants, shifts focus
GM CEO Rick Wagoner at the start of the 2008 Annual Shareholders -- June 3, 2008
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Kai Ryssdal: We'll note just for the record that the nationwide average for a gallon of gas stands at $3.98 on this third day of June.
Bearing that in mind, the May sales figures from Detroit's big three car makers that we got today come as no surprise at all.
Chrysler lost 25 percent. Ford, maker of the mighty F-series pickup truck, lost 16 percent. General Motors was down 28 percent, which contributed to this announcement from the company this morning: it's going to close four factories where it makes trucks and SUVs, it's going to offload or perhaps completely retool the Hummer brand and in the process, save a billion dollars a year.
Marketplace's Nancy Marshall Genzer has more.
Nancy Marshall Genzer: Remember that Super Bowl commercial where a groaning monster gives birth to a tiny Hummer? No love is stranger than the American love affair with the big car.
Now consumers are telling GM it's over. They have a new passion: hybrids.
[Clip from Toyota Prius Commercial]: Toyota Prius. Have a nice future.
But wasn't the future obvious? GM CEO Rick Wagoner says there's no way GM could have anticipated how fast gas prices would rise and GM sales would plummet. Late last year, GM was selling more than 100,000 trucks and SUVs per month, and then...
Rick Wagoner: Over the last couple of months, that average has gone down to about 65,000 units.
Auto industry analyst Kevin Tynan says GM was too busy treading water to think about the future.
Kevin Tynan: And you're basically doing all you can to keep pickups and SUVs in front of the consumer because that's what you need to be able to sell to cover your costs.
While GM treaded water, consumers were kicking the tire treads on the Prius and buying. Wagoner said today that GM will make more hybrids and small cars. It'll sell an electric car by late 2010.
But analyst Pete Hastings of Morgan Keegan says GM will have to work faster.
Pete Hastings: Hopefully they're just trying to manage expectations and maybe deliver a little bit more than they are communicating so far.
GM has made one thing clear: the shift away from SUVs is permanent.
In Washington, I'm Nancy Marshall Genzer for Marketplace.