GM Puts Off Truck, SUV Redesigns In New Focus

[Klaus]

GM Puts Off Truck,
SUV Redesigns
In New Focus

By JOHN D. STOLL
June 19, 2008; Page B1


General Motors Corp. is delaying the redesign of SUVs and full-size trucks as part of a wholesale review of its product and brand portfolio geared toward building lighter, fuel-efficient vehicles.

Smarting from the dramatic downshift in demand for its sport-utility vehicles and pickup trucks, General Motors is "looking at the whole product portfolio," spokesman Tom Wilkinson said late Wednesday. The shift in focus promises to puncture GM's North American profits and slow its revenue generation at least for the balance of 2008.

The entire U.S. auto industry is suffering as consumers, paying $4 per gallon for gasoline, shy away from heavier vehicles that burn more fuel than lighter, more-compact models.

Mr. Wilkinson said the company is considering how it can most effectively supply the U.S. market with fuel-efficient cars from its vast cupboard of global vehicle designs.

In the meantime, he said, the auto maker will extend the life cycle of its current lineup of pickups and SUVs. Those vehicles -- known as the GMT900 lineup -- include the Cadillac Escalade SUV and the Chevrolet Silverado pickup. The new generation of trucks and SUVs weren't slated to hit the market until at least 2012, but development of these products drains precious resources at a time when GM is battling to satisfy customer tastes.

In addition, Mr. Wilkinson said the company is evaluating how to market its products and make sure it has enough support to maintain the number of vehicle models it has in its lineup.

People briefed on the matter say the auto maker also has discussed killing off at least one future Hummer SUV product, and potentially axing another brand.

GM currently sells eight brands in the U.S., but earlier this month said it is conducting a strategic review of its Hummer brand, which is saddled with the kind of gas-guzzling image the Detroit auto maker is looking to shed. It also said it is closing four truck and SUV plants by 2010 in response to a massive decline in demand for such vehicles this year.

"There's an awful lot of discussion going on, and it's pretty fair to say everything is getting looked at," Mr. Wilkinson said.

He said GM is evaluating how to best tap the fuel-efficient small and mini cars it designs in Asia and Europe.

In coming months, GM will boost passenger-car production at a handful of factories in the U.S.

Write to John D. Stoll at john.stoll@wsj.com1
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