RIP SUV

General Motors executives voted to cancel plans to develop the next generation of the full-size sport utility vehicle, essentially erecting a R.I.P. headstone on the SUV market. According to the New York Times, "...the era of the big S.U.V. was ... done in by soaring gasoline prices and consumers fleeing to smaller, more fuel-efficient cars."

Earning an estimated $10,000 to $15,000 on every SUV it sold, GM lived off and even accelerated development of trucks and SUV's to offset shrinking passenger car revenues. But this year, sales have tumbled more than 30 percent this year and have been in decline since 2004.

All of the Big Three have had to close plants and lay off thousands of workers. "In the second quarter alone, G.M. took $1.3 billion in write-offs to reflect the drop in the value of trucks and S.U.V.’s coming off lease. Overdependence on big S.U.V.’s has also hit Ford and Chrysler hard, but, as the biggest producer, G.M. had the most to lose," according to the New York Times.

"Analysts see little point now in second-guessing G.M.’s huge commitment to the S.U.V. market when gas was cheap and Americans bought the vehicles in droves. ...Yet by focusing so heavily on bigger products for so many years, G.M. put off investing in cars that consumers want now. The company is also struggling to dismantle the truck-making infrastructure it had so diligently erected."

G.M. still expects to sell some SUV's, but not nearly as many. Instead, they will make an effort to catch up in the small-car and hybrid arenas.