Don’t view sales downturn of Cruze as cause for alarm

Many in the Mahoning Val- ley find troubling the news this week that sales of the Lordstown-manufactured Chevrolet Cruze tumbled 23 percent last month over January 2015 levels. That news, when viewed through the narrow lens of stark numbers, might lead some to believe that the Valley’s largest private employer is on a crash course toward doom and gloom.

But when the big picture is viewed with proper perspective, little indication emerges of sustained trouble for the popularity of the compact car, for the livelihoods of the 4,500 at the plant producing it and for the broader benefits that the model’s five-year success story has produced for our economy.

Of its surface, the sales report that showed Cruze sales dropped from 18,693 in January 2015 to 14,362 in January 2016 hits hard. But a variety of factors greatly softens the impact of that punch.

First, January traditionally ranks as a slow month for auto sales. And last month’s snowstorm through a wide swath of the eastern United States closed dealerships and short-circuited tens of thousands of likely sales.

In addition, bargain-basement gasoline prices have motivated many to upsize their vehicle purchases. Sales of larger cars and SUVs showed tremendous gains last year, while compact and subcompact models saw sales dwindle.

More importantly, the 2016 Cruze model on showroom floors today represents the end for this generation of Cruze-making. Many astute car buyers recognize as much and are holding out to be first on the block with the snazzy updated model.

NATURAL CYCLE

Such cyclical slides in sales traditionally accompany the end of the line of a given model. Such was the case for the Chevrolet Cavalier and its successor the Cobalt when the last models rolled off the Valley assembly line.

Given the positive hype from auto analysts on the quality, performance and design improvements attached to the next-generation Cruze, many expect sales to rebound dramatically once it is available.

What’s more, a few low-sales months do not a trend make. As Glenn Johnson, president of United Auto Workers Local 1112 at the Lordstown plant, put it, “All in all, we are still pleased that our current model sold as well as it did over its lifetime.”

Indeed the Lordstown-stamped car has sold well over 1.2 million units in its five-year run, more than its predecessor the Cobalt did in its longer run. In its heyday, the Cruze soared as the top-selling small car in the nation.

The launch of the new Cruze also comes at a particularly propitious time. Companywide, GM recently posted a record profit of $97 million for 2015. That success ripples into the larger local economy as profit-sharing checks of about $11,000 each for most Lordstown plant employees will add about $40 million in economic impact in the Valley this year.

The changing of the Cruze also comes amid apparent labor-management harmony. New national contracts were approved in Lordstown last fall, and the finishing touches now are being applied to new local pacts just in time for the rollout.

With so many positive signals emanating from GM Lordstown, big-picture observers should view last month’s dip in Cruze sales as a temporary blip. Even though we suspect a few more months of southward sales, all systems are go for accelerated success and security for the plant, its workforce and our local economy.