Valley plant a front-runner for diesel Cruze, analysts say
By Karl Henkel
Three truisms surround the future of the General Motors Lordstown Complex:
It stands a good chance of landing a multimillion-dollar investment to build the diesel Cruze.
Republican and Democratic lawmakers are clamoring at the opportunity to claim victory over a possible new investment.
No investment be made until the United Auto Workers ratifies its new four-year contract with the Detroit automaker.
Linking the Lordstown plant to the diesel Cruze project with certainty is not an easy task, akin to not knowing the final clue of an almost-finished crossword puzzle.
The known clues — including one from a source with knowledge of GM’s plans, who told The Vindicator the stars are aligning for a Lordstown investment — appear written in ink.
Most observers, however, agree with the assessment of UAW Local 1112 President Jim Graham: “There can be no new investments unless the contract is ratified.”
Local 1112 workers conclude voting on the tentative four-year contract agreement Tuesday. Local 1714 voted Saturday, with 57 percent in favor.
That pact listed seven plant investments and one that remains unidentified, though GM said it will be used to build a compact car.
Graham said he could not confirm any rumors about an additional Lordstown-built product, specifically the diesel Cruze, the development of which GM announced in July.
“Our main goal right now is getting the agreement ratified,” Graham said.
From a financial standpoint, it makes sense to link the diesel Cruze to the Mahoning Valley, said Jesse Toprak, auto analyst at TrueCar.com.
“I’d say Lordstown has the highest chance of getting the Cruze diesel,” he said. “The prudent thing to do would be to make it right there. That would be the least amount of transportation costs and be the most efficient.”
Logistically, it won’t take much for the fabrication plant at the West Complex, headed by UAW Local 1714 President Dave Green, to alter the current vehicle.
Green said with differing types of engines, the underbody of the vehicle would need modification.
As for Lordstown Complex East, headed by Graham, it would simply need to produce more vehicles.
Both Green and Graham said space is not an issue at Lordstown, which housed about 12,000 workers in the 1970s. That space houses 4,500 workers today.
“All we know is we have a lot of extra space at the plant,” Graham said.
GM has already explored uses for that space, according to a source, whose business has previously done work for the automaker. The source told The Vindicator that GM made contact this summer to discuss possible additions, such as a new assembly line at Lordstown.
The source said no deal had been finalized, however.
THEN THERE WERE TWO
GM’s Lordstown and Lake Orion, Mich. plants are two likely candidates to house the diesel Cruze, scheduled to start production in 2013.
Lordstown already is home to the original Cruze, the best-selling compact car four months running.
Lake Orion assembles the new Chevrolet Sonic and Buick Verano.
GM previously acknowledged the Lake Orion, Mich., assembly plant could be modified to produce Cruzes. At the time, the fierce demand for the Cruze nearly outweighed Lordstown’s total output.
“We were trying to illustrate how flexible the Lake Orion plant is,” Cruze Spokeswoman Lesley Hettinger told The Vindicator in June, before the diesel Cruze announcement.
She also said, “Lordstown will remain the sole home for the Cruze.”
The biggest difference between the two plants are the low-wage workers.
Forty percent of Lake Orion’s 1,500 workers are Tier 2; the percentage at Lordstown is about half that.
Tier 2 workers make up about 5 percent of GM’s 48,500 hourly workforce. They make half of the $28-an-hour regular pay of their Tier 1 co-workers but willreceive $2-to-$3-an-hour raises by the end of the new four-year pact.
But many Tier 2s are unhappy that despite GM’s financial resurgence, they were not elevated to Tier 1 status as part of the new contract.
Green told The Vindicator on Saturday that he believed those workers who voted “no” had “personal or specific issues” with the contract.
Some at Lake Orion, who chose to stay in Michigan at the Tier 2 wage instead of transferring to other plants and maintaining Tier 1 status, say they feel the same way.
That’s why a seal of approval by Lordstown workers could enhance the plant’s chances of scoring the anticipated investment that comes with diesel Cruze line.
New jobs could be filled by Tier 2 workers.
A source with some details of GM’s plans said if the contract is ratified by Lordstown, an announcement is “not imminent” but will come “soon enough.”
A GM source said the company is not ready to announce any plans.
A WIN FOR THE VALLEY
Local and national leaders alike applaud GM’s strong consideration of Ohio for additional investments.
“They’ve considered all of their options, and they looked at other options,” U.S. Sen. Sherrod Brown, a Democrat from Avon, told The Vindicator.
“We’re going to do whatever it takes to help GM keep expanding and investing in Lordstown.”
Ohio Gov. John Kasich, who last month met with representatives of the Detroit Three automakers, also hinted at possible Ohio automotive investments during that August conference call with reporters.
“They are extremely pleased with how we are all working together,” he said.
“Management and labor in Lordstown created a model of how management and labor can work together.”
The governor did not elaborate on any details.
Some took offense, though, to Republicans touting Lordstown’s success.
Former Youngstown Mayor Jay Williams, now the nation’s auto czar, said proper credit should be given to President Barack Obama.
“The Republicans need to tread lightly when taking credit for a GM investment,” he said.
“If not for President Obama, GM and Lordstown would not exist.”