Another Big Investment For GM

LORDSTOWN, Ohio (WWJ) General Motors is investing $200 million into its Lordstown, Ohio plant to build the second generation Chevrolet Cruze.

“For the last two years the team has built a great product, an outstanding and award winning product,” said GM manufacturing manager Arvin Jones.

Jones says this investment, along with $20 million being put into the Parma Metal Center, just outside Cleveland, will retain 5000 jobs.

Lordstown received a total makeover a few years ago, to prepare it for first-generation Cruze production. It’s currently running on three shifts.

“That plant, which I’d remind you was once a notoriously contentious labor-management situation has done an outstanding job with the Cruze,” says analyst Michelle Krebs. “So, it would only make sense that they continue making it there.”

Krebs said the Chevrolet Cruze got off to a very strong start, helped by high gasoline prices, and a temporary shortage of Japanese small cars, due to last year’s earthquake. Cruze sales have dipped as the competition’s increased.

“Honda’s restocked. Toyota’s restocked,” says Krebs. “The Ford Focus has done extremely well.”

Krebs says the Cruze has also been hurt by competition from the smaller Chevy Sonic and by a larger Chevy Malibu that’s in its last year of production, and seeing some significant discounts.

“Probably people are coming into the showroom thinking about a Cruze and thinking, ‘Oh wow, for the same or a little bit more money, we can get the much bigger Malibu.”

GM isn’t yet giving a timetable for the next generation Cruze. There are reports that it will debut in 2014 as a 2015 model.

The company’s manufacturing manager Arvin Jones was very guarded when asked about what we might see in the next generation Cruze.

“There will be a new exterior and interior styling, improved fuel economy, and improved interior storage space.”

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