GM to Cut Truck Output, Mulls Hummer Sale

Updated from 1:53 p.m. EDT

General Motors (GM Quote) said that because of the slowdown in the U.S. economy and the increase in gas prices, it will stop production at four plants that build trucks and SUVs, undertake a review of the Hummer line and ramp up its efforts to produce more fuel-friendly offerings.

Those announcements came as the Detroit-based company outlined a series of initiatives meant to "aggressively respond" to growing demand for fuel-efficient vehicles and to the economic challenges facing North American consumers.

Rick Wagoner, GM's chairman and CEO, said at the annual meeting of stockholders Tuesday that among other things, the automaker is planning a new global compact car program for Chevrolet, a next generation Chevy Aveo and a high-efficiency engine module for the U.S. market.

Additionally, GM will provide funding for production of the Chevy Volt extended-range electric vehicle. GM is also starting up third shifts at the Lordstown plant in Ohio and the Orion facility in Michigan, where popular Chevy and Pontiac cars are built.

"From the start of our North American turnaround plan in 2005, I've said that our goal is not just to return GM to profitability, but to structure GM globally for sustained profitability and growth," Wagoner said in prepared remarks. "Since the first of this year, however, U.S. economic and market conditions have become significantly more difficult. Higher gasoline prices are changing consumer behavior, and they are significantly affecting the U.S. auto industry sales mix."

GM said new cars and crossovers, including the Cadillac CTS, Chevy Malibu, Pontiac Vibe and Buick Enclave, have been selling strongly, and that 18 of the next 19 new products the company makes for the U.S. will be cars or crossovers.

Ultimately, GM said it wants to react to the shift in the U.S. market by boosting its output of small and midsize cars and by cutting production of pickups and truck-based SUVs.

Shares of GM were up fractionally to $17.53 in recent trading.