Supply chain issue impacts Cruze delivery, Saturday production

By Kalea Hall

khall@vindy.com

LORDSTOWN

A supply-chain issue is to blame for canceled production today at the General Motors Lords-town Assembly Plant and a temporary suspension of 2017 Chevrolet Cruze deliveries.

As of late Friday, the impact on next week’s production was still unknown.

“Every effort is being made to process vehicles to support our customers,” Chevrolet said Friday in a statement. “Our No. 1 priority is to deliver the highest-quality vehicle – to every dealer, to every customer, every time. At this point, normal production continues at Lordstown.”

Glenn Johnson, president of United Auto Workers Local 1112, said the ultimate goal is to fix the problem so it does not impact the customer experience.

Neither union nor company officials would specify what the supplier issue is.

The Lordstown plant employs 4,500 to build the next-generation Cruze. The plant has about 3,000 assembly workers represented by Local 1112 and 1,400 fabrication workers in UAW Local 1714.

“It’s out of our control,” said Robert Morales, president of Local 1714.

The plant launched the new compact car this year to follow in the successful footsteps of the best-selling first-generation Cruze.

Cruzes started to ship out to dealers from Lordstown on March 21.

Since then, the next-generation Cruze has been in such high demand that Chevrolet has decided temporarily to supplement U.S. production with Cruzes built in Mexico. The Mexico-built Cruzes will come to the U.S. market in September.

Meanwhile, production at the local plant has been ramping up, and workers have been building Cruzes during occasional Saturday shifts to meet demand. Today’s shift was canceled because of the supply issue.

In July, GM reported a 35.7 percent decline in Cruze sales. The drop likely was because of GM’s strategy to reduce fleet sales and focus on retail, or sales to individual customers. In July 2015, 40 percent of the Cruze’s sales were fleet sales, according to data from TrueCar. So far in 2016, the Cruze’s fleet sales have been below 20 percent.

Supplier issues both big and small aren’t uncommon during the launch of a new model. For example, the new Ford F-150 launched last year had supplier issues that had a long-lasting impact on production, said Akshay Anand, senior analyst for Kelley Blue Book.

The new next-generation Cruze comes with enhanced technology, upgraded safety features and a new sleek style.

Anand noted the added elements means possibly more suppliers and more room for issues.

“The more that is in a car, the more that can potentially go wrong, so this [supply issue] is not uncommon at all,” he said.

On Friday, GM had not responded to whether the supply-chain issue impacts other GM plants in the U.S. or the Arizpe Ramos, Mexico, plant where the Cruze also is produced.

“You would assume that any issue in Lordstown as far as supply issues would potentially impact production there, too,” Anand said.