GM is closing four pickup truck and sport utility vehicle factories. This will result in 10,000 jobs being cut.
The move is brought on by the high price of gas at $4 a gallon which has GM also considering closure and sale of its Hummer brand.
“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.”
GM now plans to make a new, smaller car which would get 45 miles to the gallon. The car will sell at half the price of its high-profit SUVs and pickup trucks.
In the past US car makers have been mostly unable to get by on making small cars but GM feels it has made sufficient cuts and has renegotiated union labor pay deals.
The high price of gas also means that plans for a late-2010 revolutionary high efficiency car are now approved.
Fully charged, the Volt could drive about 40 miles without using any gasoline, and a small conventional engine would recharge the vehicle, extending its range and allowing it to get the equivalent of 150 miles per gallon.
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