We would like to believe that no news is good news when it comes to the future of General Motors’ Lordstown assembly complex, but with each passing month our anxiety level rises.
Let there be no doubt that the GM decision-makers in Detroit know what’s in store for the home of the Chevrolet Cruze, one of the company’s best-selling passenger cars. It should also come as no surprise that they’re holding their cards close to the vest.
Corporations do not turn on a dime when it comes to investments and the launching of new products. Thus, our belief that plans for the Lordstown plant are in the hopper.
We can only hope it’s positive news for the Mahoning Valley. Our note of caution stems from the fact that sales of the Cruze have been soft for some time, despite the fact that the compact car has been rated high for quality, value and driver satisfaction.
Last week, GM released sales figures for July that showed a 25 percent drop in sales of the Lordstown-built Cruze from July 2016. There were 10,218 sedans sold last month, compared with 13,723 in July of last year.
In addition, there were 2,060 Cruze hatchbacks sold in July. The cars, which are built in Mexico, weren’t on the market in July 2016.
But here’s the reason for our growing concern about the future of the Lordstown plant: GM has reacted to the drop in Cruze sales by eliminating the third shift and halting production of the car for several weeks.
By contrast, the demand for GM trucks, crossovers and SUVs remains comparatively high. Low gas prices have drawn buyers to larger, less fuel-efficient vehicles.
Last week, General Motors, in a statement about its July sales, said it continues to monitor the marketplace and will make adjustments if needed.
Though low demand for the Cruze suggests further upheaval in the compact-car market, GM reported the best-ever July for sales of the Chevy Equinox, Chevy Bolt, GMC Acadia, Buick Envision and Cadillac XT5, all crossover vehicles.
“Changing customer tastes have driven us to refocus our business on higher margins, faster-growing segments, like the crossover segments,” said Kurt McNeil, U.S. vice president for sales operations. “We are launching the most all-new crossovers in our history to take full advantage of the changes occurring in the U.S. marketplace. Our newest crossovers are performing very well in the marketplace, and we’ll build on that momentum with the all-new Chevrolet Traverse, GMC Terrain, Buick Enclave and the introduction of the Regal TourX through the second half of 2017.”
GM also promised that by the end of 2017, buyers will get to choose from the newest and broadest lineup of crossovers in the U.S. auto industry.
The company’s chief economist, Mustafa Mohatarem, said that while U.S. auto sales continue to “moderate” from last year’s record pace, “key U.S. economic fundamentals remain supportive of strong vehicle sales.”
Given market analyses by Mohatarem and other GM executives for the lineup of crossovers, Valley residents would be justified in wondering if the Lordstown complex will share in the largess.
While it is true that the plant is specifically designed to produce sedans, retooling the assembly line to accommodate the newer models would not be a major undertaking. There would have to be a shutdown of production, but the disruption would be worth it if upgrading ensures the continuation of auto production in the Valley.
GM executives will not say what the future holds for the Lordstown facility, but we would hope the region and the state are given the opportunity to develop an economic incentive package – if that’s what the company wants.
We have no doubt that Ohio Gov. John R. Kasich and the Ohio General Assembly, along with the members of the state’s congressional delegation, would make GM an offer it would be hard-pressed to refuse.
The Lordstown complex is a main economic driver in this region and an important player in the state’s manufacturing might. Hence our anxiety over the uncertainty surrounding the Lordstown assembly complex.
By any objective evaluation, the GM plant in the Mahoning Valley has met every standard of production set by the company. Such performance deserves to be rewarded.