Cruze stays on track despite delay at engine plant

STAFF/WIRE REPORT

Plans to produce the Chevrolet Cruze from Lordstown are continuing on schedule even though General Motors has stopped construction of a factory that is to produce the car’s engine.

The automaker remains committed to bringing the new compact car to market in mid-2010 and will use engines from another source if need be, said Chris Lee, a GM spokesman. GM is to begin selling the Cruze in Europe next year and is producing the engine for that model in Austria.

In related news, union leaders and management at the Lordstown complex are discussing a switch to a four-day workweek in February, Lee said. Workers would be on the job for 10 hours a day, instead of eight. Other plants also have either adopted the change or are considering it, Lee said.

Among the reasons for the switch are energy savings created by four days of plant operations instead of five and creating a three-day period each week for maintenance work or the installation of new equipment, Lee said. Also, workers at some plants prefer the schedule because they receive a three-day weekend, he said.

GM said Wednesday that it is trying to conserve cash while it awaits a government bailout. One of the moves by the cash-strapped company is to delay big-ticket purchases, such as buying structural steel to build the engine factory in Flint, Mich.

“Those are huge cash outlays, and we don’t have the cash,” said Sharon Basel, a spokeswoman for GM’s powertrain operations.

The Flint plant is to produce 1.4-liter, four-cylinder engines that will power the Cruze and extend the range of the Chevrolet Volt plug-in electric car.

Basel said the delay in construction may be temporary as the company figures out its cash situation.

“Everything that involves heavy cash outlays obviously is under review,” she said. “Our intent is to still go forward with a new facility bringing that engine to Flint, Mich.”

GM announced plans to build the new plant on its existing Flint site in September, with production to begin sometime in 2010.

Basel said GM still intends to bring the Volt to market in 2010 as well.

GM views the Cruze and Volt as key parts of its plans for the future. The Cruze is supposed to get about 40 miles per gallon, while the Volt will be able to travel 40 miles on electricity alone.

GM is seeking up to $18 billion in government loans as it tries to survive the worst U.S. auto sales environment in 26 years. The company has said it is running low on cash and may not be able to pay all its bills after the first of the year without government help.

Basel would not say when construction might resume if government loans are made available, but she said there is plenty of time to build the plant, install equipment and get it up and running in time to produce engines for the two new cars.

GM said in September it would invest $370 million in the new factory, which will employ 330 hourly and salaried workers and allow the company to double its global production of smaller engines by 2011. The plant will have 300 flexible workstations that will let GM build different four-cylinder engines without retooling.

The United Auto Workers union agreed that new hires for the plant would be paid $14 per hour, about half the wages of a current UAW worker. It also agreed to a new flexible pact with GM that lets workers do multiple jobs.