GM cancels large SUV program
October 29, 2008 by Matt Brogan
In a move that would have seemed implausable a decade ago, and perhaps one that is a sign of the tough financial times faced by the US giant, General Motors have today cancelled a $2 billion (USD) investment program to update their range of full-size SUVs.
Pulling the plug on Project CXX, which was set to underpin future versions of the Escalade, Tahoe (pictured above), Yukon and Suburban, was unanimously approved by executives, ending 15 years of vehicles that defined the brand.
“It would have been very difficult in today’s environment to spend a couple of billion dollars to do a replacement,” said Robert A. Lutz, GM’s Vice Chairman and head of product development. “In a market faced with soaring fuel prices and consumer demand for more compact, more efficient cars; reality has set in.”
But with sales of SUVs steadily falling since 2004, and the company posting an $18.8 billion loss in the first half of the year, GM are in troubled waters. Share prices have seen drops of as much as 76 percent on the year – but they are by no means alone. Ford shares are down 70 percent over the same period, while Chrysler, like GM, may also loom on bankruptcy. But it is General Motors which has suffered and will suffer most, its passenger cars sold as loss-makers and its success dependent on its line of sport-utility vehicles.
Lay-offs at GM plants are set to continue, with Janesville, the firm’s oldest and most reliant on SUV production, being announced earlier this month as to close by Christmas. And if the potential merger goes ahead with flailing Chrysler, further job losses are expected, adding to the some 40,000 hourly workers already made redundant in the last three years. Hopes that a new small car could fill the production line at Janesville were dashed as GM made a commitment to its Arlington plant for future developments.
GM Chairman Rich Wagoner says development of smaller cars and lower-capacity engines will be sped up, also redeclaring the company’s commitment to delivering the electric-drivetrain Chevrolet Volt by 2010. Further resources are being poured into development of the new Chevrolet Malibu and its crossover entries, the Buick Enclave and GMC Acadia, as well as the continued development on hybrid systems.
Source: NY Times
Print it: 
It had to happen, but basically car makers only produce cars that people want to buy.
There was a big demand for large SUVs in the US, but te tide is turning.
Just wait, you’ll be able to buy a cheap 2 yr old landcrusier in a couple of years over here.
Those that own Suburbans in general love them, and need the room for passengers, loads and towing purposes.
Very *american* and the Mexican build quailty should have been lots better.
Cheers
F-0
Good, less weapons for the brain dead moron that drives this kind of vehicle.
Where are they going to put the gun rack on a small car?
What will the Gangsta’s drive now!!
Hers is an idea,
why doesnt GM pull out of the US all together before it drags their other divisions under too??
They made their bed, and shouldnt be making other countries sleep in it
I used to have an Escalade before every tasteless celebrity owned one and all of them had big wheels. Dreadful car, but I have fond memories of it. Switched it for a Range Rover and I’ll never go back because the Range Rover better by far in every aspect.
GM is on the verge of death, i do wonder what will happen to Holden when they go under.
Probably sold to the Koreans.
There have been fuel price spikes in the past and the death of the big car was supposedly near. Every time as soon as the fuel prices went down they went back to big cars.
The car makers and the American public can\’t help themselves.
The comment above “Those that own Suburbans in general love them, and need the room for passengers, loads and towing purposes.”
They don’t NEED them, they WANT them.
Andrew M sounds like a Holden employee.
Sam R sounds like he has come down in the last shower… Some people doe NEED big 4WD pal, you ever been outside of the city before chech?
when GM die so will Holden………
Forza,
how do you figure Im a holden employee??
if you actually knew me you would certainly know Im not a holden fan let alone one that shows up to their facility every day.
I say it as i feel/see it and try to be fair in the way i go about posting.
Im not a GM/Holden fan but even i can see the US division is making everyone pay for their stubborn decisions.
and that applies to more companies than just GM
most things in the US are stuffed at the moment and the auto industry isnt exempt from it. even toyota in the US arent exempt, but luckily for them their volumes and corporate manner doesnt revolve around the US
i was watching austar the other day,and there was some current “top shot” g.m. exective saying that the ev1 (20 years ago)was a complete waste of time and resources.what a @ickhead.if you’ve watched “you killed the electric car”you would of seen the leased owners of the ev1 totally heartbroken that their cars were being squashed…it just goes to plove why g.m.(u.s.a.)are in so much trouble,they are corrupt.i personally hope they close the usa arm down,let opel make the small cars,holden the big ones,and ultimately they will be better off…
Andrew M – As a Fellow [Ford] employee; I agree with you that the both GMs and Fords international subsidiaries are paying for the ignorant arogance in Detroit..
However; I recenly read on a newspaper website [think it was the washington post] an article where an “automotive industry expert said “…. those of us who are between the ages of 20-40 can expect to see the end of car production etc in the USA before they retire.. that is not to say that GM Ford and Chrysler will cease to exist [Sorry Toyota Fans]….they will merely relocate overseas”
They say a chain is only as strong as its weakest link.. and as far as GM and Ford are Concerned the weakest link is the USA
I wouldn’t be surprised if this happens within the next decade or so and GM Ford decide to build RWD cars in Australia and their FWD cars in Europe given thats where the expertise is particularly as far as Holden and Opel are concerned. As for Chrysler who knows.
Therefore; the new Torana will be built [on the old Vectra line] and Holden could even get the go ahead for their expansion plans ato build chevrolets and cadillacs – as I believe they will also streamline their line-up
Forza M, yes some people do need a 4WD, lets even say SUV. Farmers, prospectors etc, sure, need a 4WD.
Tell me how many need them in the city? Where 99% of them are often with big alloy wheels and street tyres.
Also, just because you want a big 4WD to tow your boat or horse trailer does not mean you NEED any of that. The boat and horse are just entertainments made possible by the era of cheap oil.
If/when oil goes back past $150 a barrel to $300+ the era of horse floats, big power boats and V8 company cars will be OVER for all but the big end of town.
Andrew M, thanks for the lesson in all things GM and the good ol US of A. You are right i dont know you, and jesus i am shattered about that!!
SamR Once again chech, i have to say you have come down in the last shower. to quote you “boat and horse are just entertainments made possible by the era of cheap oil.” proves there are plenty of woodducks in the world. Congratulations on getting a guernsey in that tribe.
I dont own a 4WD and never have so i have no bias, what I do have is an understanding that some people actually NEED a 4WD they use them for work purposes, get out to the bush mate and find out what i am talking about.