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GM plans second shift at Lordstown; says third shift possible



Published: Tue, June 2, 2009 @ 12:00 a.m.

By Don Shilling

GM plans to add a second shift to Lordstown and says a third shift is possible.

A bankruptcy filing hasn’t

dampened General Motors’ enthusiasm for its Lordstown complex.

A senior executive said the automaker plans to add a second shift to the complex to build the Chevrolet Cruze, which will be launched in April.

“We’re very bullish on the Cruze,” Tim Lee, GM’s vice president of North American manufacturing, said in a conference call Monday with reporters.

Union leaders said a second shift would bring back about 1,500 workers who are laid off.

The optimism about Lordstown stood out in two conference calls that GM officials had after the bankruptcy filing Monday. Mostly, the calls were dominated with questions about GM’s plans to cut jobs, eliminate brands and reduce output through a bankruptcy reorganization.

In addition to closing or idling 17 plants and parts centers, GM plans to inform more dealers this week that they will lose their franchises, said Fritz Henderson, chief executive. The company sent termination notices to 1,100 dealers two weeks ago.

Late Monday, Judge Robert Gerber of U.S. Bankruptcy Court gave interim approval for the Detroit-based automaker’s use of a total of $33.3 billion in bankruptcy financing, with $15 billion available for use over the next three weeks.

He will rule on final approval of the financing June 25. Judge Gerber also approved GM’s sale procedures, setting a sale approval hearing for June 30.

As suppliers wait for the bankruptcy court to determine how they will be repaid, Lee praised them for sticking with the automaker. He said GM paid suppliers early last week to generate confidence in the automaker’s future.

Despite the cutbacks in GM’s plan, Lee said that the automaker needs to build quality cars in North America and Lordstown is the type of plant that it is looking for.

He noted that Lordstown has a metal stamping plant that can supply parts efficiently to the assembly plant and the complex has received large investments recently. GM spent $1 billion, including a new $300 million paint shop, for the launch of the Cobalt and is wrapping up $350 million in upgrades for the Cruze.

The timing for adding a second shift is uncertain.

Lee didn’t mention a date, but Jim Graham, president of United Auto Workers Local 1112 in Lordstown, said he doesn’t think GM will wait for the Cruze launch. He’s expecting a second shift to be added before the end of the year in order to build more Chevrolet Cobalts.

Graham thinks rising gas prices and an improving economy will lead to more demand for the small car now built at the plant.

Graham said the return of a third shift to the complex isn’t out of the question once the Cruze is launched.

“If sales take off and gas prices are high, this thing could take off big,” he said.

Lee, the vice president, said GM doesn’t expect to need a third shift through 2012, but he didn’t rule it out if car sales rebound faster than expected and the Cruze “is hotter than we anticipated it to be.”

GM added a third shift to Lordstown last year as Cobalt sales surged amid high gas prices. Two of the shifts were laid off by January, and staffing was reduced from nearly 4,500 to 1,800.

Lee said that Lordstown is the only production site for the Cruze in North America — for now. He said GM is considering adding a second location.

Edmunds.com, which reports on the industry, reported Monday that GM plans to begin making the Cruze in a Mexican plant six months after the launch in Lordstown. The Mexican plant is to produce 40,000 cars a day, six times less than the number projected in Lordstown, the report said.

To prepare Lordstown for the Cruze, GM is spending heavily to install a new body shop, where the underbody of the car is constructed.

John Donahoe, complex manager, said in February that the flexibility of the new body shop could allow five or six different types of vehicles to be built in Lordstown.

Graham said that flexibility should be good for Lordstown down the road as GM develops new models.

“We’re going to take as much as they can throw at us,” he said.

Lee said the installation of new equipment in Lordstown is more than 60 percent complete.

He said Cruze prototypes are being built in Michigan, but plans call for test models to begin rolling off the Lordstown line before the end of the year.

Even Lordstown leaders said the good news coming out of Lordstown seemed odd on a day when GM filed for bankruptcy.

“I don’t want to say I’m pleased with GM being in bankruptcy,” said David Green of Local 1714. “I’m just glad they finally decided to do something.”

Employees and consumers can now see that GM has a plan and is putting it in place, he said. It’s nice that Lordstown is part of that plan and is receiving a $350 million upgrade while GM cuts back elsewhere, he said.

“We should be in great shape,” Green said.

U.S. Rep. Tim Ryan, D-17th, of Niles, said he realizes the situation is not optimal, but he sees hope for the company.

“The GM bankruptcy is a huge blow to Ohio, which compounds an already bad situation with current employees, but also with retired workers and the security of their pensions,” he said. “I am cautiously optimistic because it seems as though the GM-Lordstown plant will have a solid future and factors prominently into GM’s restructuring plans.”

Senate Minority Leader Capri Cafaro of Liberty, D-32nd, said that despite all the bad news with GM, “there is a silver lining.”

The Lordstown complex “has retained a leading role in building the next generation of small fuel-efficient vehicles. I believe the work being done right now at Lordstown will help position General Motors for a much brighter future,” Cafaro said.

shilling@vindy.com


Comments

1UnionForever(1470 comments)posted 4 years, 10 months ago

We need customers. You can build the best car in the world, but if no one comes to the dealerships, it really doesn't matter. It will be interesting to see how the bankruptcy plays out. Stay strong my union brothers. We will overcome.

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2DoctorGonzo(728 comments)posted 4 years, 10 months ago

You don't have to worry about GM building the best car in the world, and without dealerships, customers will probably be fewer and farther in between.
At least GM tried to make some real material changes and those laid off employees will not be getting paid 95% of their wages anymore...wait, instead they just screw the American entrepreneur who sells cars. This sounds like a real 2009 American tale based on the current state of our country.
Here's an early prediction: GM did not make the changes needed to become a strong going concern into the next several decades, becasue if you make 100 cars and lose money on them and then cut production of 50 of them without addressing what creates the loss, you still lose money on the product. All those degrees in Detroit cannot figure that out though.
Keep scerwing the car dealers and suppliers though. Your bankruptcy filing reads like a who's who of all the people who supporterd you while you just dragged them through the mud to keep your own pockets fat.

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3outta_ytown(6 comments)posted 4 years, 10 months ago

I just traded my 1 year old Tahoe for Toyoya. I gave GM a chance to compete for my business, and the best price they wanted to give me was the sticker price. Oh, and I wanted runnig boards, and they said they would split the cost with me. Screw you GM!!

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4VINDYAK(1799 comments)posted 4 years, 10 months ago

This comment comes from a GM loyalist of many years whose first car was a '57 Chevy and first new car was a Pontiac LeMans. I have owned many GM's over the years. I now own a Silverado truck and a Toyota car. Others in my family own 3 Honda's, 5 Fords, one Mazda and one Chevy. That one Chevy has been in the shop more times than all the rest of the cars put together. What a sad tale for GM.

GM's demise began long ago when they decided to build one car body and slap a different name brand on it to send off to different dealers. Chevrolet, Pontiac, Buick, Oldsmobile....all the same....no name brand pride....no competition......no quality. Until the Japanese came to town. They studied the market and understood what the public wanted and saw the price and quality loophole in GM. It was a long struggle, with many bumps in the road, but the public fell in love with Honda's, Datsun's, and Toyota's. The small motorcycle engined cars of the 60's have grown into quality built vehicles that rule the roads of countries around the world. Now, every auto manufacturer in the world is trying to catch up. GM is not even in the race.

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5VINDYAK(1799 comments)posted 4 years, 10 months ago

Like everyone in the Valley, I still follow news about GM and am encouraged by what I hear and read about Lordstown. I truely hope the new Cruz line is GM's first step in their turn around. My fear is that the Cruz plant in Mexico will bring about bad carma for the line. When people buy an American name brand car, they want it made in America. If you have to buy a foreign brand car then you may as well buy Honda or Toyota, which are assembled in America by American (possibly) workers.

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6Erplane(449 comments)posted 4 years, 10 months ago

Nothing like a dose of optimism from everybody here. I bought a 93 Grand Am new, and the same time a bud bought a 94 Civic new. I went 160k over 12 years with that car in the shop once for something major. He had put roughly 100k over 7 years, and had the car in the shop twice. Statisically its a tie. In the 9 years I have lived in New York, I have seen a dramatic increase in American cars on the road here, particularly Chevys (Cobalts, Malibus, Traverses).

And dps9000, quit posting. If you cant say something that is educated and not some anti-union, the valley sucks, look at me I'm smarter than you all bullpucky, dont waste our time.

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7Stan(9923 comments)posted 4 years, 10 months ago

Notice the gas prices constantly going up ? Soon GM will be building a line of bicycles to compliment the Cruze .

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8TylerDurden4Unions(3 comments)posted 4 years, 10 months ago

I just wanted to point out a glaring double-standard being set-forth by all you foreign car worshipers who buy into the "unions ruined everything" mentality. You do realize that some of American-based plants that build your infallible foreign vehicles employ UAW workers, right? So now that the UAW has their foot in the door, I'm looking for a time line as to when we can expect us union folks to topple your Japanese and Chinese prides as well? Anyone? And please don't go the cop-out route and say it won't happen because there'll still be enough built overseas.

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9CLEVELANDER(10 comments)posted 4 years, 10 months ago

I HAVE A 1979 CHEVY CAPRICE CLASSIC I HAD IT SINCE IT WAS BRAND NEW. AND THE ONLY THING I HAD TO DO WITH IT WAS CHANGE THE OIL IN IT. YOU COULD'T GIVE ME A MERCEDES FOR IT. THIS CAR LOOKS AND DRIVES LIKE THE DAY I BOUGHT IT OFF THE SHOWROOM FLOOR. GM MAKES A FINE CAR KEEP THE GOOD WORK UP LORDSTOWN IS HERE TO STAY LIKE IT OR NOT

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10Erplane(449 comments)posted 4 years, 10 months ago

Hey Ytownscum - why do I think your the same dude / dudette as dps? Anyways, last time I checked, I'm not an idiot, I'm just someone who laughs at the complainers.

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11jimiohoh(86 comments)posted 4 years, 10 months ago

GM can't fail. Barack has spoken. This Cruz is a world car. The Goverment will keep pushing money at it untill we get a change in office. GM said 1 year ago they would never go bankrupt so they didn't change a thing. How did Ford see this coming? But still, GM ruined alot of people from bond holders down to the truck drivers that move the cars. People, they will never come back to what they where. And don't forget, the Lordstown plant is over 50 years old. The Cruz may keep the plant running for 5 years tops

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12cambridge(2919 comments)posted 4 years, 10 months ago

This is great news for the valley. Additional shifts will be a huge boost for the local economy. Hopefully this is the beginning of a new and profitable GM.

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13yonko(27 comments)posted 4 years, 10 months ago

Right..Breaking news, this just in..Avanti is coming back, Covelli Centre to close..blimp factory to occupy it's space, and the Department of Defense Accounting Center and a private Nascar Track design group are in a bidding war for a parcel of land near the airport...more @ 6. Wake up people..it's done, over with, be a realist.

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14Erplane(449 comments)posted 4 years, 10 months ago

Yonko...I have to give you points for at least being creative!

http://media.gm.com/servlet/GatewaySe...

The link is GM sales figures for May. A serious look at them showed signs of life. Good news.

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15VINDYAK(1799 comments)posted 4 years, 10 months ago

Hey Clevelander...a '79 caprice Classic? That is a classic! I once had a '94 Chevy Astro van...remember those? It was loaded for its time. I put 218,000 miles on it. When I traded it in, all the salesmen had to go out to read the speedometer just to prove to themselves it was real. The 4.2 engine was still strong as ever, but I blew the muffler off of it and drove it in for a trade. It was 10 years old, afterall. Sometimes you're lucky. Sometimes its great care or sometimes its the way you talk to it.

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16redvert(2007 comments)posted 4 years, 10 months ago

There are good and bad in all vehicles. I think the key will be if the buying public accepts the new GM. Also I believe that GM and the UAW have to truly understand what is at stake for it to work. Only time will tell!

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17tll3023(35 comments)posted 4 years, 10 months ago

Here they go again, saying they will add a second shift and maybe a third. We heard this all before. I hope they are correct, but I don't think so. Will they hire at the old wages or new wages?? Will they call back they old employees at a new wage or hire new ones? Well we will see, hopefully!!!!

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18Stan(9923 comments)posted 4 years, 10 months ago

I am looking to buy a Chevy Vega or a Pontiac Astra in good condition. A Ford Pinto is on my shopping list also. Both Ford and GM have come a long way since then.

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19dbinnc(51 comments)posted 4 years, 10 months ago

What I don't understand is why is Ford getting screwed? GM and Chrysler get billions because they don't know how to run a company and no one is talking (in the news) about Ford. They may not know how to run a football team, but they know how to run a car company.
I will NEVER buy a GM or Chrysler car again. When I'm ready to shop it will be for a Ford or a Toyota or Honda (made in the USA). What GM and Chrysler should do is close all union plants and open new ones in the south. Pay a good fair wage and let the Rust Belt rust away.

The Unions Built this country and they are now destroying this country. Sorry, but it's true!!!

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20dmets(575 comments)posted 4 years, 10 months ago

Unions are bad! I see them protecting jobs of people who do not deserve them. They also make demands that are too much and if they don't get what they want they cry and go on strike. I mean it is not just the auto industry! There are too many unions! There are also unions in which can never go on strike, like firefighters, and police officers. The crazy part is many GM workers make(made) more money then most firefighters and police officers. Sounds fair that GM workers stand in one place doing the same job, and firefighters and police officer risk their lives everyday. Makes perfect sense to me. How about you? Unions are driving the US into the ground!

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21cambridge(2919 comments)posted 4 years, 10 months ago

Here is an article about an auto plant being saved along with 1,800 jobs. If two more shifts are added there are a possible additional 2,700 jobs, Of the 22 post before this one only 7 were positive and one of those was mine. Pathetic. Keep looking for the dark cloud inside the silver lining.

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22dmets(575 comments)posted 4 years, 10 months ago

cambridge: I am very glad that GM in Lordstown is staying open. I really do hope that they are adding on two more shifts. But the Valley has been prosimed or told things so many times and it never came through. So I think for many people it is a, We will believe it when we see it, kind of thing! I am so pulling for our community.

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23samjudwin(12 comments)posted 4 years, 10 months ago

They can not get the place to open by August.
Maybe they meant 3 shifts laid off.

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24Ytownnative(988 comments)posted 4 years, 10 months ago

Wow I am sooo much like GM.
I plan on hitting the number for Saturdays drawing and its possible I could hit the lotto. I think my chances might be better then there are.

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25susanmkt(1 comment)posted 3 years, 9 months ago

Thank you very much for posting such valuable information.

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