GM invests in U.S. plant for new fuel-efficient Cruze
Compact car planned for North America in late 2010
Lordstown, Ohio-General Motors plans to invest more than US$500 million in the United States to build a new compact car that will compete in an era of high gasoline prices.
Company chairman and CEO Rick Wagoner announced the size of the investment Thursday at the Lordstown, Ohio factory near Cleveland.
The sprawling complex now makes the Chevrolet Cobalt and Pontiac G5 compact cars, which have become popular with drivers because of their high fuel mileage.
GM announced in June that the Lordstown factory would be retooled to make the new Chevrolet Cruze compact.
The US$500 million investment includes $350 million for Lordstown. The company also will build 1.4-litre engines for the Cruze at a new factory to be built in Flint, Mich.
The Cruze will be launched in Europe and Asia next year. It will come to North America in the second half of 2010.
The new car is expected to get around 72 kilometres per U.S. gallon on the highway. The most efficient 2009 Cobalt or G5 with a manual transmission gets up to 59 kilometres per gallon, GM says.
"Our goal is for the Chevrolet Cruze to lead in fuel economy in this very competitive car segment,'' Wagoner said in a statement.
The investment in Lordstown, about 80 kilometres southeast of Cleveland, is good news for a region hit hard by the demise of the U.S. steel industry.
GM already is adding a third shift at the Lordstown assembly plant to keep up with heavy demand for Cobalts.
Cobalt sales were up 16.4 per cent through the first seven months of the year, while G5 sales were down about one per cent.
GM has refocused its efforts to produce smaller vehicles than the big SUVs and trucks it has been building for years.
The company has cut thousands of jobs and announced the closure of several North American plants, including a truck assembly factory in Oshawa, just east of Toronto. That plant, which employs 2,500 people, is slated for closure in about a year.
Chevrolet North America vice-president Ed Peper said in a statement that GM can't make Cobalts quickly enough.
"Our dealers are asking for many more Cobalts than we can build,'' he said.
The Cobalt's success prompted GM to add the third production shift and 1,400 jobs - the largest hiring since Lordstown opened in 1966. The complex will employ about 4,300 hourly workers and roughly 300 salaried workers.
GM has released little information on the new Cruze, which officially will debut in October at the Paris Motor Show.
It will be about 4.6-metres long, almost identical to the Cobalt. But GM said the Cruze will make better use of its interior space, offering more room for five passengers and cargo. Whether or when the Cobalt and G5 might cease production has yet to be determined, GM has said.
General Motors is the world's largest automaker with about 266,000 employees around the world and manufacturing operations in 35 countries. The company is in a tight race with Toyota Motor of Japan for the industry lead in annual sales.
Last year, GM sold nearly 9.37 million cars and trucks under its various brands.