General Motors will announce plans today to keep production of its Chevrolet Cruze compact car at the auto maker’s Lordstown, OH, assembly complex when the next-generation model comes out around 2014.
GM does not specify how many more years it will extend the local operating agreement beyond its current 2014 timetable.
The United Auto Workers union Local 1112 in Lordstown will make the announcement today, says President Glenn Johnson. “It’s good news,” he tells WardsAuto, declining to elaborate ahead of informing his union members.
Speculation has been GM would announce a variant for the Cruze, perhaps a hatchback or wagon model that it sells in other world markets, but spokeswoman Annalisa Bluhm tells WardsAuto the sole addition currently planned for Lordstown is a previously announced diesel-powered Cruze.
The Cruze has been solid seller for GM in the compact segment since its debut in 2010, with the Lordstown complex pumping out 514,030 units with a 3-shift operation through July, according to WardsAuto data. The Cruze is GM’s best-seller worldwide.
The car’s U.S. sales through July were down 12.7% to 128,838 units compared with 147,620 in like-2011. The Cruze’s share of its segment in the first seven months also slipped, to 9.8% from 12.2% year-ago, and it likely would benefit from a midcycle refresh or an additional variant.
The share loss also reflects stronger inventories by Asian auto makers hamstrung for product last year by the earthquake and tsunami in Japan. GM refuses to discount the Cruze to the extent of the competition in order to maintain margins, the auto maker says, even if it misses out on some sales.
The Cruze diesel is expected in 2013, which GM North America President Mark Reuss announced one year ago.
The auto maker recently invested E20 million ($26.5 million) in its Turin, Italy, engine-research facility to prep the 2.0L 4-cyl. turbo for U.S. tastes and climates.
The engine is expected to push the Cruze’s fuel economy to more than 50 mpg (4.7 L/100 km) on the highway, sources have told WardsAuto. The most fuel-efficient Cruze GM currently offers is an Eco version, getting 42 mpg (56 L/100 km) highway.
Reuss has said GM will emphasize the performance of the diesel model more than its fuel efficiency, given it will pack lots of low-end torque.
The announcement today in northeastern Ohio comes amid a furious and expensive battle for Democrat Sherrod Brown’s seat in the U.S. Senate. Republican Josh Mandel is challenging Brown’s bid for a second term, which experts say hinges on how well President Obama fares in the state.
A key talking point of Obama’s re-election bid this fall will center on the aid package his administration provided GM and Chrysler to undertake a taxpayer-funded bankruptcy.
Brown joined Reuss for the launch of the Cruze at Lordstown in 2010. The event was celebrated by the manufacturing operation’s 4,500 employees and local communities.
Two years earlier, the facility’s future hung in the balance. It was home to some of GM’s most contentious union relations and the auto maker lost money on every compact car the 46-year-old plant built.
But a spike in gasoline prices in 2008 forced GM to begin rebalancing it truck-heavy product portfolio to more fuel-efficient passenger cars. The decision has proved largely successful, although at the time was too late to affect the auto maker’s path to bankruptcy.
