(Sub-headline corrected on 6/8/08)

The nation’s car market continued to suffer from high gas prices, with sales tumbling 11 percent in May and General Motors market share falling to the lowest level in more than half a century. GM announced new cuts to truck production as its CEO called the American consumer’s move to more fuel-efficient cars “by and large, permanent.”

Sales plunged 28 percent at GM, 25 percent at Chrysler and 16 percent at Ford as car buyers moved to smaller cars and away from trucks. Toyota and Honda, much less dependent on truck and SUV sales, were down 4 percent and up 16 percent, respectively.

In a sign of the times, a Ford exec called the sudden shift away from trucks “breathtaking” and the company’s F-150 pickup fell to No. 5 on the bestseller list, The Wall Street Journal reports on B5. It’s been No. 1 almost every month for thirty years. The new top two? The Honda Civic and the Toyota Corolla, says The New York Times.

It’s about as easy for Detroit to shift gears as it is to do a three-point turn in a Mack truck, but CEO Rick Wagoner (with a name like that, does this guy have vehicles in his DNA or what?) announced it will close four truck and SUV plants within two years and move to making more small cars, the Journal says on B1 and the Times on C1.

The Times calls the cuts “drastic” and says it will leave 8,000 workers “idle,” and the Journal says it means the behemoth’s losses, which total nearly $60 billion since the start of 2004 (“one of the worst stretches of corporate losses in history”), will continue for another couple of years. Bloomberg says it means GM will produce 700,000 fewer trucks and SUVs a year, while boosting car production by 200,000 because of its new view that oil prices aren’t going back down.

“This isn’t a bubble,” said David Littmann, senior economist for the Mackinac Center for Public Policy, a nonprofit research group in Midland, Michigan. “Unless there’s a concerted political decision to go out and drill for more oil, the automakers will no longer be American. GM could have a hyphen in its name.”

It’s an embarrassing admission of error by Wagoner, who made a big bet on SUVs just three years ago. SUV sales in the last year are half what they were in 2003 and GM’s market value is one-fourth what it was when Wagoner took over in 2000, says the WSJ. Might as well fire up the death watch.

GM may jettison the absurd Hummer

In a move rich with symbolism, GM said it may even sell off its Hummer brand, which has fast become a relic of the lost innocence—and indulgence—of dollar-a-gallon gasoline. The Financial Times tells us in the second paragraph of its GM story that “Owners of the marque’s military-style vehicles include 50 Cent, the rapper, and Arnold Schwarzenegger, California’s governor.” Thanks for that, FT. Nice to know the reverse pyramid is still alive.

The Hummer news combined with the truck-plant closings elicited the Quote of the Day from the Times on C1:

“I think G.M. is basically declaring the S.U.V. dead,” said John Casesa, managing partner of the auto consulting firm Casesa Shapiro Group in New York. “The trend away from these vehicles is irreversible.”

Meanwhile, GM’s board gave the go-ahead to the Chevy Volt, its new electric car, now slated for 2010.

The NYT has an interesting bit of page-one analysis that estimates the total cost of a vehicle based on an average five years of use. Adding in gasoline makes the F-250 and Lincoln Navigator look much more expensive than they do on the lot. Over five years, with gas, they’ll cost about $100,000—or as the Times helpfully puts it, 20 percent of the average family’s income. And that’s pre-tax income.

A Ford Focus runs less than $40,000, while a Toyota Prius costs a bit more.

Credit-ratings industry gets religion (under duress)

The credit-ratings industry is close to a settlement with the New York attorney general to reform its business practices, the papers say.

The deal would try to remove a major conflict of interest from the industry by changing how it gets paid.

The WSJ:

Now, while more than one ratings firm reviews most deals, not all of them always rate the deal and get paid. That gives the firms an incentive to go easy on their rating in order to win the business.

Under the Cuomo settlement, which would cover the hardest-hit portions of the mortgage market, the firms would get paid for their review, even if they didn’t end up getting hired to rate the deal. This would mean the firms would get paid even if they were tough.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.