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GM to end production of Buick Rainier

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GM will end production of Buick Rainier

Division down to handful of models

February 7, 2007

Detroit Press

BY GREG BENSINGER

BLOOMBERG NEWS

General Motors Corp. will end production of the Buick Rainier SUV in the second quarter to trim the division's product line and spend more to develop and sell its remaining models.

The Rainier represents about 2.5% of the daily output at GM's Moraine, Ohio, plant, the only place it's made, spokesman Tom Wickham said Tuesday. It isn't clear yet what effect the change might have on employment, he said.

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GM CEO Rick Wagoner is paring Buick to three or four models, about half as many as in 2005. The world's largest automaker slowed production after U.S. sales fell 8.7% last year. Buick sales slid 15%, and Rainier's sales were down 17%, to 12,691.

"GM is trying to position Buick as a luxury brand, and I think the Rainier just didn't fit that mold," Dennis Virag, president of Automotive Consulting Group in Ann Arbor, said. "It's not selling well, and it looks more like a down-market SUV than a luxury one."

By turning to new models such as the Enclave crossover SUV, GM hopes to lift Buick sales and help reverse $13 billion in losses in the seven quarters through Sept. 30. It has said about 40% of sales this year will come from new models.

The automaker will increase production of GMC Envoy, Chevrolet TrailBlazer, Isuzu Ascender and Saab 9-7X SUVs made at the plant near Dayton, Wickham said.

Shares of Detroit-based GM rose 72 cents, or 2.2%, to $33.43 in New York Stock Exchange trading. They have gained 43% in the past year.

"There has been no determination on what impact the decision might have" on the workforce, Wickham said. GM employs about 2,700 at the plant, represented by the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers-Communication Workers of America.

GM began notifying plant workers and dealers of its decision Monday, Wickham said.

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