GM reassigns engineers to fuel-efficient cars

General Motors Corp. has delayed indefinitely a program to replace its large pickups and sport utility vehicles as it reassigns workers to develop more fuel-efficient car models.

Engineers working on the redesigned Chevrolet Tahoe SUV and GMC Sierra pickup for 2012 are being shifted to other projects, GM spokesman Tom Pyden said.

“This is hugely significant,” said Rebecca Lindland, an analyst for Global Insight Inc. “This is a clear sign they are reevaluating everything, because this has been the core of their bottom line for years.”

The rising cost of gasoline has already prompted GM Chief Executive Rick Wagoner to announce the closing by 2010 of four of the factories that build the large SUVs and pickups.

GM reported a 37% plunge in U.S. sales of pickups, SUVs and vans in May.

The automaker lost $38.7 billion last year, its largest deficit ever, after writing down $39 billion of future tax benefits. GM hasn’t had an annual profit since 2004.

The automaker will continue to work on improvements to the current large pickups and SUVs, primarily to boost fuel efficiency, Pyden said.

GM had been studying options for the next Chevy Tahoe, Silverado and other models under the code name GMT10XX. The program has been suspended until GM has a better sense of whether the light-truck market might recover, Pyden said.