Today, General Motors announced that it would forego $2 billion in government loans promised as part of its initial bailout package in December.

According to GM, “This development reflects the acceleration of GM's company-wide cost reduction efforts, as well as pro-active deferrals of spending previously anticipated in January and February.”

Notable signs of deferred investments include the cancellation of the new Duramax 4.5L V8 engine yesterday, along with halting construction of a new engine factory last month.

As we reported earlier, GM plans to source initial engines for the Volt from Europe, so delaying the new plant won’t slow down Volt production.

Tabling the diesel engine seems more unfortunate. Light pickups, which have traditionally had strong sales to small businesses even before consumers started commuting in them, could use a more fuel-efficient option. And given people’s propensity to use the trucks for towing, a diesel engine with good torque and fuel economy could be just what the light-truck market needed.

Currently GM and Ford offer diesels only in their heavy-duty 3/4–ton pickups. The giant heavy trucks we last tested cost more than $50,000 and still got worse fuel economy and than their light-duty counterparts with gas engines.

Apparently for now, GM plans to leave the market for light-duty diesel pickups to Chrysler and possibly Indian manufacturer Mahindra.
 
—Eric Evarts