GM to shed SUVs, jobs
"Capacity adjustments." That's what the General Motors press release calls the closure of four North American truck plants that provide jobs for 10,000 people.
GM's pickup and SUV business has fallen on hard times lately. According to the LA Times, sales of the gas-guzzlers plummeted 37 percent in May, and things at Ford and Chrysler are not looking much better. The Big Three automakers, who in the 1990s came to rely on the super-sized vehicles as a business model, are now having their lunches eaten by the likes of Honda, whose Civic sold in record numbers last month, as well as Hyundai, Mazda, Kia, Subaru, and other makers of smaller, more fuel-efficient cars.
So few were surprised Tuesday at GM's annual shareholder meeting when chairman Rick Wagoner announced that the company would be shutting down truck plants in Oshawa, Ontario; Toluca, Mexico; Moraine, Ohio; and Janesville, Wis. Mr. Wagoner also announced that the Hummer brand, that 16-foot-long, three-ton icon of American excess, would be under "strategic review" for a possible sale. In May, Hummer purchases dropped 60 percent.
Instead, GM will go back to making cars. The company announced that it will be adding third shifts in September to the Orion Assembly Center in Michigan, which builds the Chevy Malibu and the Pontiac G6, and to the Lordstown Car Assembly in Ohio, which builds the Chevy Cobalt and the Pontiac G5. The company also plans to roll out the Chevy Volt, a plug-in hybrid, by the end of 2010.
The end of the SUV era is undoubtedly good for the environment, but before celebrating, greens should check out the Janesville Gazette, the daily newspaper for the Wisconsin city of 60,000 whose GM plant provided 2,600 jobs. There you can read about John Resch, father of four, who worked at the plant for 18 years.
"I had brothers that worked there, and I have cousins that work there, and I have many, many friends that work there, and this is going to affect the rest of their lives," he told the Gazette.
Or you can visit the local paper for Oshawa, Ontario, a city of 140,000 that is home to GM Canada's headquarters. Faced with the loss of 2,600 jobs, workers are now blockading the entrance to the headquarters, in an attempt to force the company to reverse its decision. They say they'll be there "as long as it takes."
Many critics will say that GM waited too long. As Wired puts it, the company "grew fat and lazy cranking out SUVs that ran on cheap gas, but it ain't working anymore."
But drivers also share the blame. After all, GM used to make the Geo Metro, which had some models boasting 40 miles per gallon. Spurned by the public, the line was discontinued in 2001. Now, the subcompact is making a huge comeback, with bids on eBay going for many times the blue book value. And SUV owners trying to ditch their gas-guzzlers now face a daunting resale market: Last month, 36 percent of those trading in their SUVs owed more on the vehicles than they were worth.
Tom Tomorrow, whose comic runs in Salon, described the driving public's blinkered vision best in his strip titled "Short Attention Span Theatre Presents: A Brief History of Gasoline Consumption in America."
But no amount of finger-pointing will help the "capacity adjusted" GM workers, most of whom now face a Morton's Fork between leaving town or taking a job with lower pay and benefits.
This week, lawmakers in Washington have been fiercely debating the costs of 'decarbonizing' the American economy by weaning it off fossil fuels. What's often missed in this debate is that, as oil reserves dwindle, our economy is decarbonizing itself, often with troubling human costs.