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Cruze sales up while production is cut back
By Kalea Hall
LORDSTOWN
Chevrolet Cruze sales started off the year with an increase, but the production of the compact car has been cut back.
On the same day General Motors announced a 38.9 percent year-over-year increase in Chevrolet Cruze January sales, the automaker also announced there will be several weeks when production is down at the Lordstown plant where the Cruze is made.
“Lordstown Complex employees have been notified that several weeks of production down time have been added to the 2017 build schedule,” a GM spokesman said in an emailed statement to The Vindicator on Wednesday. “We are not commenting on the timing of the down weeks or the impact it may have on the production schedule. This action is being taken to align Cruze production with market demand.”
The planned down weeks are subject to change, the spokesman noted.
Neither Glenn Johnson, president of the United Auto Workers Local 1112, nor Robert Morales, president of the UAW Local 1714, said when the expected down weeks are coming to the plant this year, but they explained the dates are subject to change.
“The market shifts and continues to shift, and we have to make adjustments to meet demand on the car,” said Morales, who represents the plant’s fabrication workers. “They are all subject to change because the market can change.”
This week and next week, the plant is in its transition phase from three shifts down to two.
“They are training and getting back up to speed,” said Johnson, who represents the plant’s assembly workers.
The assembly side of the complex saw the loss of more than 600 jobs with the end of the third shift. The fabrication side of the plant lost about 235 jobs. The fabrication side will maintain three shifts except in the body shop.
The workers affected by the layoffs started working at GM Lordstown in 2012 or after. GM announced the layoffs in November. The automaker said it had to reduce production of the Cruze to align with the drop in consumer demand for compact cars. Analysts see no end in sight for the trend of consumers buying sport utility vehicles and trucks.
GM’s need to adjust inventory to align with demand may come with a cost, but analysts say it is beneficial for the future.
“Those layoffs are difficult to take, but [the loss] contributes to the health of the organization,” said Eric Lyman, vice president of industry insights for TrueCar. “If GM can remain healthy as a brand, then it means that they are able to leverage those existing facilities they have.”
In its January auto-sales release Wednesday, the Detroit automaker highlighted its continued commitment to staying profitable by keeping an eye on inventory levels.
“GM has made it clear that it is focused on matching supply to demand,” said Michelle Krebs, senior analyst for Autotrader. “Inventories are still edging up despite heavy incentives. You’re going to see many automakers be very disciplined.”
GM said its U.S. dealers sold 195,909 cars, trucks and crossovers in January, down 3.8 percent year over year. Retail sales, or sales to individual customers, were 155,010, down 4.9 percent from a year ago.
The Cruze had 19,949 sales in January 2017. Broken down, 17,259 were retail sales and 2,690 were fleet sales. The retail sales were up from last year’s figure of 14,180 and fleet sales were up from 182.
“That’s definitely a positive sign,” Johnson said of the Cruze’s January sales. “I am happy it’s up, and the consumers are finding a well-built quality car.”
The hope is to sustain an increase in sales.
“We need to sustain these numbers,” Morales said. “If we are able to sustain these numbers, the outlook could be to possibly turn back to three shifts.”
Across the auto industry, January sales were down year over year after a record month of sales in December.
“January may be suffering a bit of a hangover after those December deals,” Krebs said. “It appears new-car shoppers are taking a bit of a breather.”
Ford Motor Company reported U.S. retail sales of 120,400 vehicles were up 6 percent year over year, fleet sales of 52,212 declined 13 percent leaving total sales to decline 1 percent.
Fiat Chrysler Automobiles U.S. LLC reported U.S. sales of 152,218 units, an 11 percent decrease compared with sales in January 2016 of 171,352 units.
Meanwhile, American Honda Motor Co. Inc. reported total January sales of 106,380 Honda and Acura vehicles, an increase of 5.9 percent over January 2016.
Toyota Motor North America Inc., reported its U.S. January 2017 sales of 143,048 vehicles decreased 11.3 percent year over year.