GM LAYS OFF 9,000 TRUCK WORKERS; GAS-GUZZLER BUSINESS PLAN IS CRUMBLING, SAYS NRDC

Jon Coifman, 212-727-4535; Roland Hwang, 415-875-6178



NEW YORK (October 28, 2004) -- Just weeks after proclaiming that rising gas prices are having no effect on sales, General Motors today announced it is temporarily idling five truck plants, sidelining 9,000 workers in Arlington, Texas; Janesville, Wisconsin; Oklahoma City; and Lansing, Michigan starting immediately after the Christmas holidays.

The shutdown comes despite GM's profit-sapping customer rebates, which are the highest in the industry -- as much as $6,000 per vehicle on some full-size truck and SUV models. It follows layoff announcements affecting 900 workers in a Michigan truck plant and an entire shift at the Indiana Hummer plant.

"This is a real hit for the workers in these plants. GM's problems are impacting the stock market as well. It's all happening because GM is following a dead-end business plan built entirely around the gas-guzzler," said Roland Hwang, the chief motor vehicle analyst at NRDC (Natural Resources Defense Council). "You can't keep on paying the customer to buy your product and expect to stay in business."

Hwang said the company needs to focus its resources much more aggressively on cleaner, more efficient technology that reflects the demands of a marketplace dependent on expensive oil imports.

GM's troubled strategy recently earned the company a downgraded credit rating from two of the three leading ratings houses. (For more information, see NRDC's press release.)

Crumbling sales directly contradict GM's pronouncement earlier this month suggesting soaring gasoline prices are having no effect on the company bottom line. In a call with Wall Street industry watchers earlier this month, GM analyst Paul Ballew said the company was not worried about rising pump prices.

GM depends even more on gas-guzzlers than its competitors. Like Ford and Toyota, about half of GM sales are classified as light trucks, but Hwang said GM's pickups and SUVs tend to be bigger and heavier than its rivals, making GM especially vulnerable to a sustained upturn in oil prices.

This week the company rolled out yet another version of the Hummer SUV, announcing it will sink $250 million on a manufacturing line for the new truck at its Shreveport, Louisiana, plant.

To learn more about the economic threat of oil dependence, see NRDC's analysis, "Safe, Strong and Secure: Reducing America's Oil Dependence."

Join Us