The final Chevy Cruze was built at the GM Lordstown plant in Ohio on March 8th, but parts production remained, and could have continued through June. But that’s also a done deal now, as the few workers who remained at the plant tasked with building Cruze replacement parts finished doing so on April 5th.
The proposed indefinite idling of the Lordstown factory has been a lightning rod of controversy since November, when GM announced a new restructuring plan. Politicians on both sides of the aisle, including Democratic presidential candidate Bernie Sanders and U.S. President Donald Trump, have criticized GM’s decision to idle the factory. The local Lordstown economy is expected to lose $3 billion this year alone from the idling.
General Motors proposed idling the Lordstown plant as Cruze sales have fallen in the last few years, forcing the automaker to eliminate two shifts at the plant in the last few years. At one point, the factory operated three shifts and employed 4,700 people. In hopes of saving Cruze production at the plant, the United Automobile Workers union made various confessions totaling $118 million in hopes that production would continue at Lordstown. In hindsight, the move likely only delayed the inevitable.
It should be noted that, as GM discontinues its Cruze compact sedan and hatchback in the U.S., all foreign automakers are continuing to offer their compact models, including Toyota Corolla, Honda Civic, Nissan Sentra, Hyundai Elantra, Kia Forte, Mazda3, and Volkswagen Jetta.
General Motors has received a fair amount of criticism for the way it has handled communications about its restructuring. The proposed closing of five North American plants has not sat well with many who see a robust U.S. economy. Last month, Paul Ingrassia, editor at the Revs Institute for Automotive Research, said the automaker should take a different approach to communicating its plan to the public.Â
The Detroit-based automaker is, however, investing in U.S. factories that produce high-profit models like crossovers, SUVs, and trucks while also investing in autonomous and electric vehicles.
Subscribe to GM Authority for more Chevrolet Cruze news, Chevrolet news, and around-the-clock GM news coverage.
Comments
another market GM can not compete in . its strange to see all imports advertising sedans GOOD JOB MARY she has to go
Tom the other brands are all showing declines in sales of small car sedans. Even Honda and Toyota are seeing declines.
Mary could have done the Roger Smith thing and just keep building them then offing them at a loss on the fleet rentals just to keep the plant open. That would again bankrupt GM. Kill the value of those who did buy a Cruze and still lose the plant.
Lets let GM and the UAW meet this summer and just see what comes from it.
Hell, Barra is Roger Smith reincarnated. Come up with a lineup of vehicles that don’t sell and pour money into vehicles that nobody wants all the while cheapening the products that do sell and looking market share in the process.
You really prove you have no clue daily.
Yep the Nox is not selling. The Acadia since the down size has moved more product than ever. The introduction of the new mid size truck has grown fast and profitable.
The Buick line of SUV models is making more money than their cars did for 20 years.
The Denali line is pure profit and selling in record numbers.
There are two ways to make money today in the auto industry. Oneis to sell as much stuff as you can. The other is to control cost and focus on profit per unit sold.
The market is contracting so only one of these plans remains viable. Today’s goal is to do more with less in many industries.
The auto market will sell less and less products.
If increasing the profits per vehicle and focusing on the products the public wants today. Then she is doing what is right.
If given two programs that cost 10 billion dollars one is cars that would return 10% on dollar invested or a small CUV that the public is buying in greater numbers that would return 25% on dollar invested. Is there any choice.
Look st any parking lot or intersection and sedans are out number 5 to 1 most of the time
Suburban/Yukon/Tahoe sales down. Camaro sales down. Traverse sales down. Terrain sales down. Cadillac sales down across the board. And of course Sierra and Silverado sales down. And with generous incentives being offered across GM’s lineup this month, selling on margin is not having the intended effect.
There is a choice to build vehicles that bring in 10 % on the dollar when you have capacity like GM. Honda, Toyota, and Nissan find a way to build those vehicles in the US.
Generous discount apply nearly everywhere. It is spring and marketing gets aggressive consign out of a slow winter with many bad storms.
Guess what auto sales drop in bad winters.
The big SUV are going to slow with the new mod slow around the corner.
Cadillac is just a tossed up mess with too many leadership changes that has gone on for 20 years.
As for Honda and Toyota they have to make the sedans sell as that is their trucks. They make most of their money there. But note how they are moving to more and more CUV models..
In time if it continues to decline they will bail too.
People want utility even in a small CUV vs a small sedan that can not fit much in the trunk at the same price.
Note GM truck sales are down as they mostly made crew cabs and few extra cabs or standard cabs. Supplies were not full. GM beat Ford when the started the new Ford trucks too. Nature of the market.
Tigger did you read the news today out of Marysville Ohio?
Honda just announced the slowing production of the Accord and killing the second shift.
What to know why. Honda said slowing demand for small sedans. Honda has already cut back on production of sedans in England too.
This change in the market is not some made up thing and it is real. People want vehicles that they can use and carry items that the smaller cars no longer can carry.
Years ago an American mid size sedan could double as a truck with a ten speed in the trunk and a 4×8 sheet of plywood on the roof. Today the bike will not fit and nor will the roof take a sheet of plywood with no damage.
Hell most people could not even take home their TV set today in a sedan. I know mine will not fit in the Malibu.
That line at the Honda plant is being retooled for electric vehicles. It is a sub line that only works one shift. THe folks there are not being thrown out of a job like at GM and the plant is not being closed like GM has done in Lordstown.
Note the EV products are years away.
The first shift will linger only till it is not needed.
No one was tossed out of a job. A vehicle that was declining in sales in a dying segment was shut down before it was expected to.
It is being proactive unlike past GM who built so many unwanted Grand Prix cars that they sold them at losses.
The Lordstown plant is i idled and the future will be determined in July. They will either get a new product as when one is ready or the UAW will negotiate to gain jobs in another plant.
To be honest I would be shocked if the close the plant permanently. Things are quite right now and that is a sign of a possible future.
Scott3: Sounds nice, but I remember when I was involved in these types of issues in the past one would not simply base product decisions on just per sale margin. The old saying was that while a particular product might be low margin, if the sales were healthy they would pay for a lot of overhead. As Mary slashes product offering and I assume, top line sales revenue, is she cutting overhead to match? Of course somehow, in the modern corporation, productive overhead (R&D, product design, production support, etc) always seems to be cut more than non-productive overhead (corporate management, etc). I’m not sure that the risky bets on Autonomous Vehicles and all-electric cars count as productive overhead, at least in the near term.
Q the key to your statement is I remember when. Today the game is played much differently. High development cost have changed the game as well as ever increasing regulations.
Note the news I just posted above. Honda just killed the second shift at Marysville Ohio for the Accord due to slowing small sedan sales. It is not just GM this is something effecting all.
The thing is you can kill the car now as it declines before you incur losses or you can lose money then try to kill it then. The time is coming few will be selling these cars.
The internal cooperate cuts have come but they are not sexy news worthy cuts for the media. Most go unreported and often many are not disclosed as they are internal and not subject to union protest. The tech center was hit with many cuts earlier this year.
The Autonomous and Electric are a push to move GM forward. Both are not going to replace the present cars in the near future but many of their systems will be added over time and they will slowly be integrated. Heck I have a GMC now that will steer itself and stop itself to a small degree.
The Electric end is many places are going to regulate EV cars into relevance. It will take time to still drive down cost so it is important to keep them moving forward. Once cost are down they should be cheaper and easier to develop. This will make them more profitable. No government emissions testing. No CAFE testing. etc.
Also the work being done here is good for stocks. The market loves tech stocks and they hate auto stocks. GM right now is 4 times Ford stock prices and twice the value of FCA. Most is due to the work they are doing in these areas. It also keeps the hedge funds at bay from coming in and stinking up the place.
the risks in a market with contraction and ever escalating cost will drive some major changes. We have yet to see the last automaker failure and or merger. Many will need a dance partner. The question is who will be the one to lead. GM right now is in a place where they will lead not follow.
Scott3: So you admit it, it’s really all about playing the Wall Street casino, not about long term responsible corporate management. Trouble with casinos is the house always wins and the players eventually lose. For a good example, look at what eventually happened to GE after decades of “Building Shareholder Value” by liquidating the company.
The reality is long term management is and always have included Wall St.
Most of all of American businesses have been built on Wall St money. Most of us retire on money invested in the Wall St market.
Do bad things happen on Wall St yes. Do more good things happen hell yes.
Just because some of the far left want to make billions of everyone in Capitalism does not make it true.
Yes there are risk on the market but if you do your home work and calculate your risk and rewards generally you come out ahead in the long run.
The difference is like buying a lottery ticket that is pure gaming vs playing black jack where you can calculate the odds. One is gambling the other is gaming. There is a difference.
Even if you take your money and invest in a business you open there is always the risk of failure but you can control the odds.
I gave done well on the market and have family members who taught me at a young age how it works and how to invest smart.
Opportunity is there but you need to be smart enough to not just go in blindly.
I would rather risk my money at my choice in the market vs just giving it to the government and living off what ever they give me that was not wasted before I get it.
She’s incompetent due to 2 main reasons.
First, the handling and communication about the idling of the plants and which models were being discontinued (look no further at how many times the fate of the Cadillac CT6 was flipped around).
Second, she sold Opel and Vauxhall to PSA at a loss. Now PSA is making money off of those brands when GM couldn’t. Think losing a brand like Vauxhall (their UK reach) isn’t important? Or Opel (rest of Europe market) especially when Opel makes so many Buick cars? That sale will be the death of Buick. Now GM has NO presence in Europe and this caused one of their foreign plants to close as well.
https://money.cnn.com/2018/07/24/investing/opel-vauxhall-gm-psa/index.html
Paul with the circumstances GM was under Opel was a money loser. PSA had liberties they could take GM could not.
In the long run PSA will regret the purchase. The move to America is going to be just another Fiat. They can only win on price and they will not be cheap enough.
Buick lives due to China not Opel. The Regal and Lacrosse are toast due to lack of Sedan interest. SUV sales are what is working. The American SUV sales of Buick are just add on sales for the brand and the highly profitable GMC line the dealers hold.
the bottom line no china no need for Buick.
I do understand declining numbers but to kill most sedans are going to force sedans buyers to foreign brands . I have seen it already
And when they go, and if they have good experience, they are not coming back. They will move to more expensive car models of that brand or their cuvs/suvs or pick ups! So foolish!
Yet GM still have sedans that are damn good and no one buys them at massive discounts.
Case in point Buick. They have two great cars yet they sell the SUV 5 to 1.
Good, but not good enough.
I will be a prime example of GM and their misguided management.
My intent last year was to buy a 4.2TT Platinum to replace my 2017 3.0 Platinum. When they couldn’t decide what they were going to do with the CT6, I knew it was time to move elsewhere. My CT6 has been replaced with a BMW M550iX, and if my experience is positive, as it has so far, when the lease expires on my Equinox Premier next October, first look will go to a BMW cuv/suv to replace it. Very likely I will never be back.
Keep in mind, not everyone wants or can afford a cuv/suv, but wants a new vehicle. I’m trying to recall, figures recently heard, but the average cuv/suv can be $4-$6K more than a car. Some people do not have that money, even though you/someone else tells them they should buy the cuv/suv anyhow. A cuv/suv becomes very impractical when you can’t afford it!
Quite frankly, I as a consumer could care the less, how profitable a company is. The vast majority of my purchasing decisions, are impacted dramatically by the price.
I said my entire business career, the largest problem with American business, is their inability to think long-term. Only consideration is profit/stock valuation now–immediate gratification. A large part of that is the fault of the corporations and their boards who implement incentive packages that highlight immediate results and damn the future!
Wonder what the time window was set at for providing OEM parts for the Cruze; and what model years were covered?
I believe by law one replacement parts have to be available for 8 years after the last vehicle is built.
There were Federal laws that at one time went back 20, 15, 10 years. They last ones were eliminated by deregulation in the 1980’s. I have found one Federal law dealing with length of time and that is an 8 year window on Emissions items warranties.
It also should be noted the foreign automakers the author lists ARE NOT top heavy models of; trucks, SUV’s, CUV’s or other utility type vehicles. Do, it is not a surprise that they continue to offer a much fuller line of traditional autos. A reasonable conclusion is GM builds what it wants to build where they believe they have product that competes at a high level. Harley Davidson ran this string out a little too long and now are seemingly lost. Perhaps GM decided before the final ball dropped to drop out of markets they had low performing product.
Well there goes my hopes of keeping my Cruze around for awhile….if it tears up or is wrecked how am I gonna find parts for it?
Get a grip.
The parts will be around as long as you will ever have it.
I have a 35 year old Pontiac and parts are not an issue.
Anyone watch the last Grand Tour Funeral for a Ford?
The show how in Europe the SUV CUV craze has killed the mid sized Ford sedan. The Ford was the king of the British market for decades. If you did not own one several people in you4 family did.
The sold 197,000 cars in England years ago and in the last struggled to sell 900.
The failure of the sedan is now moving globally.
GM for once is on the leading edge of the future products. Like it or not the jobs lost here will help save jobs else where when GM stems the losses they would have incurred,
Sometimes you have to lose a toe to save a foot.