Tuesday, April 29, 2008

The market responds

This is bad news for Wisconsin's economy, but a good sign for motor fuel consumers.
More than 750 workers at the General Motors sport utility vehicle factory in Janesville are expected to lose their jobs when the nation's largest carmaker eliminates one of its two shifts in July.

The cuts represent the most dramatic impact yet of record-high oil and gasoline prices on Wisconsin's economy.

The factory is one of four GM plants that will see jobs cut. The automaker says it has far too much production capacity compared with customer demand for large SUVs and pickup trucks.

"The market has dramatically softened in our large SUV and full-size pickup truck segments," GM spokesman Chris Lee said. "That's basically why we made the call."

This downturn in sales of gas guzzlers is evidence that the market is responding to $3+ gasoline prices. Reduced demand will follow, leading to lower, or at least slower growing, gas prices.

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