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GM Ditches Two SUVs as Slump Worsens

By Joe Benton
ConsumerAffairs.com

December 12, 2005

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General Motors is giving up on the seven-passenger mid-sized TrailBlazer EXT and the GMC Envoy XL and will halt production of the two vehicles in February. They are produced at the Oklahoma City plant that GM will also close in February.

Only GM's full-sized Chevrolet Tahoe and Suburban along with the GMC Yukon and Yukon XL will offer seven- and eight-passenger SUV seating.

GM’s share of the U.S. auto market is down across the board from 46 percent 30 years ago to 26 percent now. The company plans to close nine U.S. plants and dismiss 30,000 workers.

The demise of GM is more than bad news for the U.S. auto industry and car buyer who choose the Big Three. This is bad news for everyone. Once upon a time U.S. trade policy was designed to benefit the American worker so American families could enjoy a high standard of living.

That is no longer so.

The U.S. is in the process of developing the global economy. Policy that is good for the global economy is considered to be good for the U.S., its workers and their families.

The manufacturing sector of the U.S. economy that once employed a third of the labor force now employs perhaps 10 percent of all U.S. workers and that number is decreasing.

The demise of the SUV is an early warning sign that strikes at the heart of a American auto industry which is now too inflexible to adapt to the new rules in any timely manner.

"We just couldn't react," GM Chief Executive Rick Wagoner said. "It really highlighted that the underpinnings of our business are too fragile. So if we lose mix or volume, we cannot get costs down as fast as sales volume comes down."

GM has lost nearly $4 billion this year and has named the head of European operations to the post of chief financial officer.

GM’s Chief executive refuses to resign despite the losses and he will not suggest how long a corporate turn around might take to revive the ailing automaker.

"Other people may or may not have time frames, but it's not what I'm worried about," he said. "I'm focused on the fact that we need to fix the business, and that's really what is driving me."

It is perhaps too simple to say time may be running out for GM, but it just may be the time frame that counts.

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