GENERAL MOTORS Exec puts hold on small-car plans
An analyst expects GM to announce a new car for Lordstown in April or May.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
LORDSTOWN -- A new General Motors executive has applied the brakes to a new small car that is expected to bring a $500 million renovation to the Lordstown Assembly Plant.
The car was expected to be announced this year, but Robert Lutz, recently named chairman of GM North America, has held up the project to review the plans, said industry analysts and a union official.
"It's one of the projects he's really taken hold of," said Mike Wall of IRN Inc. in Grand Rapids, Mich.
Wall added that he still thinks the replacement for the Chevrolet Cavalier will go to Lordstown and expects an announcement in April or May.
John Mohan, shop chairman for United Auto Workers Local 1112, said Lutz won't commit to the project unless he's sure GM can make money.
"They're revisiting every aspect of the product," he said.
Renovation dates: GM has been looking at the Lordstown plant for a few years, at first proposing a new plant with a new-car launch in 2002 -- and now a renovation with a launch of 2004. Mohan said these renovations are so massive that either they must start soon or the proposed launch will have to be pushed back.
Mohan said corporate officials visited the plant two weeks ago and gave positive signs that the renovation plan developed by the union and plant management would be funded.
Lutz told car industry reporters recently that he is reviewing all new products and one or two models will be canceled, with others being deferred, pulled ahead or added. He didn't talk about specific models.
Renee Rashid-Merem, a GM spokeswoman, said company officials are giving the Lordstown project "a lot of focus and attention" to determine if it fits with the company's overall needs.
"What the outcome of that will be, I don't know," she said.
Wall said Lordstown remains GM's best-suited plant for small cars. Moving small-car production out of Lordstown could come only with a realignment of GM plants, he said.
News reports earlier this year said GM officials were considering moving up the launch date of the Cavalier replacement to 2003, but Wall said Lutz's review has returned the launch to 2004.
Hands-on executive: GM had planned to base the new car on the Opel Astra, which is produced by GM's European operations, but Lutz wants the car to have its own design, Wall said.
David Cole, director of the Center for Automotive Research in Ann Arbor, Mich., said GM is trying to decide where the small car market is headed.
Recent new models, such as the Chrysler PT Cruiser and Pontiac Vibe, are small cars that offer a larger amount of space that can be used in various ways. But traditional passenger cars such as the Toyota Corolla and Honda Civic remain popular.
"How this will play out depends on Lutz's take on it," Cole said.
Lutz, who was known as the driving force behind distinctive products such as the Dodge Viper and Prowler when he was at Chrysler, is taking a detailed interest in design issues at GM.
"He's asking questions like, "Do we need a retractable grab handle? Or is a fixed handle OK?" Wall said.
The Automotive News reported last week that Lutz is removing standard features that he doesn't think attract buyers and putting more emphasis on craftsmanship. Out are items such as lighted vanity mirrors on nonluxury cars, high-intensity rear-seat reading lights and multisection sun visors. In are more appealing interiors, better feel on knobs and switches and better workmanship on exterior sheet metal.
Model issues: Wall said Lutz also is looking at production costs and other issues, such as whether the Pontiac Sunfire, the twin of the Cavalier, is needed. Wall said he thinks the Sunfire remains vulnerable because of the addition of the Vibe next year.
Craig Bierley, brand manager for the Sunfire and Vibe, told Automotive News recently that Pontiac is likely to replace the current Sunfire with a new model, but no final decision has been made.
Wall said GM remains committed to replacing the Cavalier.
Mohan said it's too early to say what the drive to cut production costs would do to staffing at the Lordstown plant.
Each time the car is redesigned, however, fewer workers are needed because improved engineering makes the car easier to assemble, he said. The plant employs 4,300 hourly workers now, compared with 7,500 before the last redesign of the car for the 1995 model year.
GM also has said it is considering spending $230 million to upgrade the adjacent fabrication plant, which supplies the assembly plant and employs about 2,400 hourly workers.
shilling@vindy.com