New Realties Force General Motors To Retire Biggest SUVs

New Realties Force General Motors To Retire Biggest SUVs

by Matthew

The sea change taking place in the auto industry these days has forced car companies to examine their entire operations from closing down factories, laying off workers, seeking alliances with other automakers, and discontinuing models. America's three major automakers have been particularly hard hit in the most recent downturn, with some questioning whether General Motors, Ford, and Chrysler can survive, at least in their current forms.

General Motors (GM), the biggest of the three, has lost tens of billions of dollars over the past four years and is losing money at the rate of one billion dollars monthly. With new products in the pipeline, GM finds itself squeezed on both ends: needing money to develop new vehicles, but losing money as sales continues to decrease.

One of the longest and most heralded names in the GM portfolio is the Suburban, a big SUV that is favored by families, outdoorsmen, and shuttle operators. With passenger seating for eight or more, plenty of legroom, and a luxurious, high profile ride, the Suburban has been faithfully in service since 1936.

However, recent news from GM indicates that the Suburban and other vehicles like it, (i.e., Chevrolet Tahoe, GMC Yukon, Cadillac Escalade) are on their way out as the automaker has decided to scrap plans to replace them with slightly smaller, lighter models. Citing a drop in demand for SUVs and an ongoing money crunch, GM has abandoned development of its next generation SUVs and will discontinue them in three years - just in time for the Suburban's 75th anniversary.

GM's truck and SUV portfolio has long propped up the automaker, helping the company turn a profit and remain competitive even as foreign automakers gained ground by developing new lines of smaller cars, advanced technology, and keeping pace with rapidly changing consumer trends. Indeed, Toyota, though they've been caught with their share of bigger vehicles, is in an excellent position to weather the current crisis, sitting on a hoard of cash and having a broad selection of hybrid, compact, and midsize vehicles that consumers want.


For GM, the company is living on borrowed time, reviewing which products can be slashed while still trying to hold onto its many brands. Though its HUMMER brand is for sale, no buyer has been found and the company is shifting its production forecast around in a bid to spread out cash. Its ongoing talks with Cerberus Capital Management to purchase that company's Chrysler operations seems way off base right now, but with the threat of tens of thousands of jobs disappearing, GM brass may be looking at gaining some leverage with the federal government to gain additional intervention over and beyond the recently passed loan guarantee money.

At this point in GM's storied 100 year history, the company is going through its most painful restructuring, one that is heavily compounded by an over reliance on bigger vehicles and the worst economic downturn in two decades. Time is running out for GM and for its tens of thousands of workers who must be worrying just what their future is with the iconic automaker whether tasked with building the Suburban or any other GM model.