DETROIT -- General Motors must restructure its business model in the United States to cut costs and build cars and crossovers that command high transaction prices, COO Fritz Henderson says.
GM today announced four plant closings and the possible sale of the Hummer brand as it reacts to high gasoline prices and a deep decline in consumer demand for full-sized pickup trucks and SUVs.
Consumers want fuel-efficient vehicles, and if those are winners, consumers will pay for them, Henderson said in a conference call with analysts and reporters. Meanwhile, GM is watching demand wither for traditionally high-margin vehicles, such as full-sized pickups and SUVs.
These are our most profitable vehicles, particularly the full-sized utes, Henderson said. We need to be able to produce more profitability from our passenger cars because well be under pressure in terms of revenue.
GM is getting better transaction prices on vehicles such as the Chevrolet Malibu and Cadillac CTS sedans as well as its popular crossovers -- the GMC Acadia, Buick Enclave and Saturn Outlook -- than it has traditionally, he said.
It helps when you get it right, Henderson said.
Hendersons answer to how GM will tweak its vehicle lineup is stay tuned.
What we need to assess and what we are assessing is whats our B plan going forward in terms of product, he said.
If the consumer does return to trucks, Henderson said, GM can easily add shifts at its remaining truck plants to boost production.
GM does have a two-mode hybrid variant of the Chevrolet Tahoe and GMC Yukon SUVs it launched this year. When asked whether GM would increase production of the hybrid variant, Henderson stopped short of outlining GMs plans.
We have a lot of options going forward, Henderson said. We will have more hybrids in those technologies and other applications, but at this point we have nothing to announce.