Workers on General Motors Co.'s massive auto assembly line are hoping the new Chevrolet Cruze they will assemble this summer will be the lifeline that keeps their plant alive.
"It's beyond your wildest dream. This is the car of the future. All bets are riding on this car," said Kenneth Banfield, acting shop chairman of United Auto Workers Local 1112, which represents about 2,200 of the 3,000 hourly workers at the Lordstown's assembly plant.
That "bet" General Motors has made for a compact car has cost the automaker about $350 million in engineering, retooling and investments at the auto assembly plant and metal stamping center 75 miles northwest of Pittsburgh, GM spokesman Thomas Mock said. The Cruze will go into production during the third quarter, for introduction this fall with other 2011 models.
The Cruze will replace the Chevrolet Cobalt as GM's high-volume compact car, Mock said. The plant will cease production of the Chevrolet Cobalt on June 24, then complete the conversion for the Cruze, he added.
Competing with the Honda Civic and the Toyota Corolla in the compact market is what GM wants the Cruze to accomplish, said John Wolkonowicz, senior automotive analyst for IHS Global Insight Inc., an independent research and analysis firm based in Lexington, Mass.
"The Cruze is a great example of a really nicely finished small car," said Wolkonowicz, who focuses on the North American auto industry for Global Insight. It has been "reasonably successful" in its foreign markets, and it's important to GM, and Lordstown, for that success with the Cruze to continue in North America, he added.
"It's much more of a premium car than the Cobalt," which GM found could not compete with the Civic or the Corolla, Wolkonwicz said.
Even though GM has not announced a suggested retail price for the car, it's likely to be more expensive than the Cobalt, Wolkonowicz said. GM needs to price it higher for more profit, as Americans move away from costlier trucks and toward more fuel-efficient vehicles, Wolkonowicz said. But it can't be priced so high as to keep sales lower because GM still needs a higher volume of production to drive down costs, Wolkonowicz said.
"There's more money put into the Cruze (than the Cobalt). They're (GM and the Lordstown plant) all walking the tight rope on this one," Wolkonowicz said.
The Cruze the Lordstown plant is introducing this summer is being tested by the federal government, insurance companies and GM engineers for safety and performance, Mock said. The company has built about 40 models, and likely will build 800 to 1,000 models for testing, Mock said.
Unlike the other new models that go out into the North American market, Mock said the Cruze has undergone 4 million test miles from previous introductions in Australia, China, Germany and Great Britain, Mock said.
As the production of the Cobalt winds down, Banfield, who has worked at Lordstown for 27 years, said the plant's employees are optimistic that the fuel-efficient Cruze will be profitable for GM. There were about 350 workers still on layoff, and some of those were being called back to the plant, Banfield said.
Those workers have been on a roller-coaster ride with GM since then-CEO Rick Wagoner announced in August 2008 that the Cruze would be built in Lordstown. From that high mark, the automaker plunged into bankruptcy by June 2009. Wagoner was forced out of GM's top post by President Obama's administration because of GM's problems.
"There were a lot of unsettled members here," not certain what would happen when GM emerged from bankruptcy, Banfield said.
"That's one thing the bankruptcy taught us. We have to compete," Banfield said.
When GM could not compete, the Lordstown workers suffered last year. Many of the autoworkers at Lordstown spent about nine months on layoff in 2009, as Cobalt production plunged to just 88,000 units, Mock said, a victim of the terrible economy. Production of the G-5 Pontiac added about another 20 percent to that Cobalt production.
The new year has brought new hope to Lordstown with the launching of the new car.
"This is totally positive. It should only increase employment," said David Green, president of UAW Local 1714, which represents about 900 workers in the metal parts stamping plant located next to the assembly plant. About 71 of the recalled employees were UAW members hired under the current contract, which sets lower wages than the workers hired under previous contracts
"We're really in a good place with the prospect of more work coming in," Green said.
Pittsburgh Tribune-Review
By Joe Napsha
Feb. 21, 2010
