DETROIT (AP) -- General Motors Corp. is postponing nearly all of its spending on product development in 2009 and 2010 as part of a cost-cutting effort, an automotive trade publication reported Wednesday.
Automotive News, citing sources familiar with GM's plans that it didn't name, reported on its Web site that the Detroit-based automaker is cutting spending on engineering, design and development.
The report said GM hopes to save as much as $1.5 billion and that the introduction of key vehicles such as the new compact Chevrolet Cruze, due to start production in 2010, could be delayed.
GM spokesman Tom Wilkinson said Wednesday that the company isn't commenting on specific product programs but continues to align resources behind highest-priority ones. He said GM evaluates its product programs monthly.
"We adjust them where the market programs are going," Wilkinson said.
GM announced in June that it would retool its factory in Lordstown, Ohio, to make the Cruze. It was considered a major victory for a region that still hasn't recovered from the demise of the U.S. steel industry.
"We don't know anything at this point," said Jim Graham, president of United Auto Workers Local 1112, which represents Lordstown workers. "Everything is rumor stage and we don't want to comment."
GM has been scrambling to ramp up production of smaller vehicles. It believes the keys to its success are the Cruze, which is expected to get about 40 miles per gallon on the highway, and the plug-in Chevrolet Volt, which can run up to 40 miles on battery power with a small gas engine extending its range.
The Volt, expected in 2010, and the Chevrolet Camaro sports car, due out in 2009, are protected from the cutbacks, the Automotive News report said.
GM is in talks about acquiring rival Chrysler LLC and both companies are having cash troubles. They have been hit by the auto industry sales meltdown due to the U.S. economic downturn and are seeking additional federal help.
Earlier this year, GM changed product plans involving its trucks and SUVs.
GM said in June it was indefinitely halting a major overhaul of its full-size pickup trucks and sport utility vehicles as it dealt with a drastic drop in sales of those products amid skyrocketing gas prices. That change was part of an effort by GM to shift resources toward smaller, more fuel-efficient vehicles.