With gasoline prices approaching four dollars per gallon in the United States, more and more consumers are turning away from the traditional gas guzzling American cars and trucks. General Motors has announced they will be closing as many as four production plants in North America that make trucks and large sport utility vehicles.
GM is said to be struggling to sell its larger models, and is considering dropping the Hummer brand of ultra heavy sport utilities altogether. GM CEO Rick Wagoner told reporters that they are “considering all options” regarding the Hummer line of vehicles, even a “complete sale of the brand.”
The Hummer in particular represents the 1990s American attitude about transportation. With cheap gas, and very little public concern about environmental damage or conservation, the Hummer became a big seller in the US, though it never really enjoyed success in other parts of the world. In some ways, the big gas guzzling Hummer came to be seen as part of “the American problem,” an overabundance of hubris, with a willful disregard of the environment.
But these days, things are changing rapidly. The era of the Hummer is coming to a close, and GM is well aware of that. The most profitable vehicles these days tend to be hybrids and other low emission/high fuel-efficiency cars. And with the current price of gasoline being reported as a major factor in the car buying choices of the American public, dealerships are struggling to sell off Hummers and other large SUVs, even though many are offering steep discounts and buyer incentives.
Shifting to greater production of fuel-efficient vehicles is a wise move on GM’s part. The plant closings planned are said to represent a “structural change” by GM in order to meet the needs of the current economic environment, including the rising cost of fuel.
GM is also expected to save approximately $1 billion a year by reducing their output of trucks and larger (gas hungry) vehicles. At the same time, the company plans to add extra shifts to many of their small and midsize car production factories.
Many people assumed that the American car companies had learned their lesson back in the 1980s, when Japanese manufacturers like Honda and Toyota began dominating the American market with small, reliable, and more fuel-efficient vehicles; but something went terribly wrong in the 1990s. It seems that the American car companies forgot the lessons of the 80s, and went back to the kind of short-term thinking that had allowed the Japanese manufacturers to succeed in America to begin with.
And once again, we find Detroit struggling to keep up with foreign auto manufacturers. GM and Ford are both phasing out the largest and least fuel-efficient of their vehicles, and rushing to produce more hybrids and small, fuel-efficient cars. Obviously, these companies didn’t quite learn their lesson the first time around.
Now day’s everyone facing same problem of fuel.there should be way to overcome that problem.
Comment by Nadya — June 10, 2008 @ 3:48 am