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Big hopes, big hurdles — Workers to begin building GM’s Cruze at LordstownBig hopes, big hurdles — Workers to begin building GM’s Cruze at Lordstown

July 11, 2010
By RAYMOND L. SMITH, Special to the Salem News

WARREN -The launch of the Lordstown-built Cruze is being carefully watched by everyone from General Motors Corp. executives to the owners of small mom and pop stores, all hoping the car maker has built a vehicle that will be an international best seller.

It is a tall order.

GM has never built a small car that made money. Its previous small cars usually lost between $850 and $1,000 per vehicle, according to Sean McAlinden, vice president of the Center for Automotive Research. The cars traditionally have been beaten in the marketplace by the Honda Civics and the Toyota Corollas of the the world.

The car company, its union and even some industry experts are saying the Cruze finally may be that small GM-made car that competes and wins in the market.

The new model will begin rolling off the line this week as GM workers return to the plant Monday following their routine two-week summer hiatus.

McAlinden says the investment that GM has put into the Cruze and the promise that some models will provide a family of four a drive of up to 400 miles on a 10-gallon tank makes it a promising vehicle.

''Its last small vehicle, the Cobalt, was not rated a success,'' McAlinden said. ''However, the Cruze's larger size, better designed interior and Echotech option that will provide a 40 mph drive will make it an attractive car to purchase.''

McAlinden said none of its competitors - the Honda Civic, Toyota Corolla or Ford Focus - will be able to make the same mileage claim.

''The hope is the Cruze will be able to sell more than 200,000 units a year worldwide,'' McAlinden said. ''It is rare that an American small car sells that well. Usually, they sell between 150,000 to 170,000 units per year.''

The Cruze already is selling well in China, he said.

''It is hoped the Cruze will be a global car,'' McAlinden said. ''Lordstown has a car it can be proud of. We hope GM will have a smooth launch. The original launch of the Cavalier was considered too slow.''

United Auto Workers Local 1112 President Jim Graham is confident they will succeed.

''We're looking for a flawless launch,'' Graham said. ''There were mistakes in the past. We've learned from them. There was more and a wider variety of training for this car that had gone into any previous model built in Lordstown. We are doing everything very slow and methodical. We want the car to be right when it goes out the door.''

The majority of the first 300 cars to be built in the plant this month will be sent to Detroit for inspection and further testing, Graham said.

The complex will produce 3,000 new vehicles in August, and in September the plant should be in full production, allowing for the production of 60 cars per hour, he said.

Extensive training on the making of the Cruze has been taking place over the last two to three months. There also has been changes in how the cars will be produced in the plant.

An example is moving the body shop from the assembly plant to the fabrication plant to create a better production flow.

By the time the Lordstown complex is fully operational, it will have approximately 5,000 people working on it.

There will be will be 3,200 people in the car plant, Graham said.

''It's the lowest number of people we've had working on the complex while having three full shifts,'' Graham said. ''We are focused on building the best quality car in the world.''

Dave Green, president of UAW Local 1714, said there is an emphasis on quality that has been put on this car from the highest level of the corporation through every person working in the Lordstown complex.

When the union members return Monday from their two-week break, Green said a lot of the workers will be working with different teams and in different work areas. The culture will change.

In spite of the numerous changes happen in the complex, Green said he expects enthusiasm to be high as the workers return to the plant.

''People recognize the importance of this car to the corporation," he said. "GM has been investing a lot of money and energy into the Cruze."

Even with the lower number of employees, GM's Lordstown plant still is one of the top employers in the Mahoning Valley region, said Tony Paglia, head of Government Affairs for Youngstown-Warren Regional Chamber said.

''A 2008 study done by Team NEO indicated that the complex, combined with all of the other businesses that have dealings with it, generates about $4.3 billion to the area's economy annually," Paglia said.

For every worker employed at GM, another 1.5 jobs are sustained in various business-to-business and consumer industries, according to the study.

Local governments will realize about $9.5 million in wage taxes.

The Youngstown-Warren region benefits from the $1.4 billion contribution to the gross regional product, which is used as a measure of economic wealth in the region.

It was that financial impact that convinced residents, community leaders, social leaders, the unions and GM executives to work together in the "Bring it Home" campaign nearly a decade ago.

"That period when we nearly lost the complex has since paid big dividends," Paglia said.

"There has been a change in attitude, especially in management and labor relations. That likely helped the Lordstown plant land the Cruze.

"Credit has to be given to the local UAW leadership and the management for looking beyond their self interests and to what was best to save jobs," he said. "That has not happened all over the country."

Paglia suggests GM's and the UAW's success in working together has shown that labor in this area is realistic in wanting to keep employers here.

"It shows this area is a good place for productivity," he said. "That may influence other companies to look favorably when deciding to locate or relocate into the valley."

Lordstown Mayor Michael Chaffee is optimistic the new car will be a success.

He has to be hopeful. About 70 percent of the village's income taxes come from plant or its associated businesses.

Over the last several years, the village's finances have been tight. It has not had money to do infrastructure improvements.

"Once the plant once again has three full shifts, we may begin looking at dedicating more money to capital improvements," Chaffee said. "We want to get back (in capital improvement support) to where we had been in the past. We want to have a schedule of improvements, especially to our roads and services."

Lordstown has a 1 percent income tax on people working within the village limits.

Although concerned that there will be fewer workers - with some earning less money than former employees at the plant - Chaffee said the village was able to maintain most services during the years of one and two shifts at the plant.

The village places a lot of emphasis on its roads, because they are heavily used by GM, its suppliers and associated businesses.

"Beyond the direct financial benefits we receive from a successful operation at the GM complex, we also believe it gives the area a psychological boost," Chaffee said.

"People will feel more positive about their opportunities, their communities and will do home improvements or purchase items they otherwise would not have."

The Associated Press contributed to this story.



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