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SUVs May be Reaching End of the Line in U.S.

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December 24, 2008 by   Leave a Comment

Even a federal bailout could not save three of the last remaining plants in the United States still making sport utility vehicles, according to a New York Times report.
Reeling from its financial problems and a collapsing SUV market, General Motors on Tuesday (Dec. 23) closed its factories in Jainesville, Wis., and Moraine, Ohio, marking the passing of an era when big S.U.V.’s ruled the road. The moves followed the shutdown last Friday of Chrysler’s factory in Newark, Del., which produced full-size SUV’s.
The last Chevrolet Tahoe rolled off the line in Janesville shortly after 7 a.m. in the 90-year-old plant, which had built more than 3.7 million big SUV’s since the early 1990s.
Most of the plant’s 1,100 remaining workers were not scheduled to work the final day, but many showed up for an emotional closing ceremony. Dan Doubleday, who had 22 years on the job, broke down in the plant’s snowy parking lot afterward.
“I was a fork lift driver,” he said, glancing at his watch through welling tears. “Until about seven minutes ago.”
The fate of the Janesville, Moraine, and Newark plants was sealed this spring, when rising gas prices suddenly made SUV’s unpopular, and long before President Bush approved $17.4 billion in emergency loans last week to keep GM and Chrysler out of bankruptcy.
While the overall new vehicle market has dropped 16% so far this year, sales of big SUV’s have plummeted 40%.
With consumers shifting rapidly to smaller, more fuel-efficient cars, GM no longer needed to produce big SUV’s in Janesville as well as in a plant in Texas.
The Times reported that shrinking market shares have forced GM, Chrysler and the Ford Motor Co. to close more than a dozen assembly plants and shed tens of thousands of workers in recent years. The moves have devastated communities from Georgia to New Jersey and from Michigan to Oklahoma.
Even so, GM and Chrysler are likely to close more manufacturing facilities as they overhaul their operations to meet conditions of the federal loans.
“The companies are moving very fast now to close plants, but it may be too little, too late,” said John Casesa, a principal in the Casesa Shapiro Group, a consulting firm. “They’re doing now what they should have done 15 or 20 years ago.”
GM’s Moraine plant was the last to build the midsize Chevrolet Blazers and GMC Envoys that were once among the best-selling vehicles in the country.
The Janesville factory built three of the biggest and most profitable vehicles in GM’s lineup, the Chevrolet Tahoe and Suburban and GMC Yukon. The Chrysler plant in Newark also made big SUV’s — the Dodge Durango and Chrysler Aspen.
Their closings leave the Big Three with only one factory each still devoted to making traditional big SUV’s — Ford in Kentucky, GM in Texas, and Chrysler in Detroit.
The Janesville plant once employed more than 5,000 workers and turned out 20,000 Tahoes, Yukons and Suburbans each month. With its closing, residents worried about the future of this city of 64,000 people, about 75 miles southwest of Milwaukee.
More than 1,000 workers were laid off at the Moraine plant. Under terms of the U.A.W. contract for all its members, they and the workers in Janesville and Newark will collect unemployment checks and payments from GM that together equal about 80% of their take-home pay.

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