Friday, October 21, 2011
By Karl Henkel
khenkel@vindy.com
LORDSTOWN
General Motors Co. has renewed its commitment to the Mahoning Valley, this time with a $5.5 million investment to build the diesel Chevrolet Cruze.
GM on Thursday announced that the Lordstown plant has been awarded the rights to build the diesel Cruze, a product announced earlier this year.
“We’ve been trying to get a new investment for some time,” United Auto Workers Local 1112 President Jim Graham said. “And the driving force behind these new products is our membership. This brings us added job security.”
The Lordstown plant will start offline work on the diesel Cruze sometime next month and run validation tests next year.
Sales of the diesel Cruze are expected to start in 2013, said GM Lordstown spokesman Tom Mock.
“We’re real excited,” said UAW Local 1714 President Dave Green. “It’s going to give our customers another choice.”
Both Green and Graham said that all details of the investment — including additional jobs — have not been announced by the automaker but should come out over time.
The $5.5 million will be used to modify both the stamping and the body shop for the diesel engine.
Green previously said that with differing types of engines, the underbody of the vehicle needs modification.
Diesel engines get 20 percent to 40 percent better mileage than gasoline engines, which helps as automakers try to meet fuel-economy standards. Diesel fuel, however, costs about 10 percent more than regular-grade gas, and diesel engines cost more to produce.
Analysts expect the diesel Cruze to average about 50 miles per gallon, which would be about 7 mpg more than the diesel version sold in Europe. That’s about 8 mpg more than the U.S. Cruze ECO.
The model will be the first Detroit passenger-vehicle diesel since the 2006 Jeep Liberty CRD sport-utility. It is also the first diesel car from the Motor City since the 1980s.
Kristen Andersson, auto analyst at TrueCar.com, said the Cruze may be the first of many diesel variants offered in the U.S.
“Volkswagen has brought diesels [the Jetta] to the U.S., and they’re selling well,” she said. “The Cruze is the perfect car because they already sell a diesel version outside the U.S.”
Though GM has not announced a price for the new car, Andersson expects GM to offer it at a similar price point to the current model and the diesel Volkswagen Jetta — at least initially — somewhere around $20,000.
The news comes just a few weeks after the UAW ratified a new four-year contract with GM.
More than 70 percent of Local 1112, which assembles the Chevrolet Cruze, voted in favor of the new agreement, and union officials hinted that because the vote was so one-sided, they were hopeful the plant could secure an additional product.
GM had previously announced that it would build a diesel variant of the bestselling compact car — for which it has sold 212,019 units through the first 12 full months — but at the time did not say where it would be built.
The Vindicator, however, in a Sept. 26 story, reported the Detroit automaker had explored expansion projects and had focused on building the Cruze variant at one of two locations — Lake Orion, Mich., or Lordstown.
GM officials would not confirm the location at the time.
The $5.5 million investment is a good start, but Jay Williams, former Youngstown mayor and current federal auto czar, hinted that more could be on the way.
“I wouldn’t be surprised if in the future, an additional investment is announced [for Lordstown],” he said.
Williams, who was at the Lake Orion plant a week ago with President Barack Obama, said Lordstown is “well regarded throughout the GM family and the industry” and that this investment further cements Lordstown’s importance.
Local politicians concurred with Williams.
“Any time a plant can add more vehicles, I think you’re seeing yourself in the context of the company,” said U.S. Rep. Tim Ryan of Niles, D-17th.
U.S. Sen. Sherrod Brown, a Democrat from Avon. said Lordstown was the clear choice to build the Cruze.
“As the home of the original bestselling Cruze, the Lordstown plant was far and away the clearest and best choice for building the diesel Cruze. This is tremendous news for the workers at Lordstown and the entire Mahoning Valley community,” Brown said in a statement.
“This ‘Made in Ohio’ car epitomizes how central Ohio workers and manufacturers are to the U.S. auto industry,” he added.
Ohio Gov. John Kasich also released a statement, saying the announcement “is further proof of the confidence that GM has in its Lordstown work force and of the confidence GM has in the jobs-friendly climate we’re working to create in Ohio.”