GM Cuts Half of Lordstown Plant's Workforce as Chevrolet Cruze Sales Slide
General Motors summoned all 3,000 of its Lordstown Assembly employees to the Ohio plant this afternoon, and half left the meeting with an uncertain future.
The automaker said it plans to cut the second shift at the plant, just a year after GM scrapped the third shift in the face of declining compact car sales. Lordstown, which opened in 1966, builds only the Chevrolet Cruze.
The Youngstown, Ohio newspaper The Vindicator reports that the shift will end on June 15th, leaving 1,500 workers out of a job, though an attrition program offered by the automaker should see some of those workers enter retirement. WFMJ claims the retirement packages are worth $60,000.
Regular production, now on one shift, starts up again on June 18th. GM employs 2,700 hours workers at Lordstown, plus 300 salaried employees.
Congressman Tim Ryan (D-OH), who toured the plant in late March, was quick to issue a statement in the wake of the news. Ryan points the finger at President Trump and the Environmental Protection Agency’s new mandate to roll back fuel economy standards.
“I am deeply disappointed by today’s GM Lordstown announcement,” Ryan stated. “While low gas prices encourages the decline of compact car like the Chevy Cruze, President Trump’s intention to weaken fuel economy standards is putting his thumb on the scale in favor of the larger cars and SUV’s made elsewhere. He claimed he was against the government picking winners and losers, and yet he goes against the very region and state that helped put him in office.”
Corporate average fuel economy (CAFE) targets enacted by the Obama administration did little to stem the surge of buyers away from traditional passenger cars and into commodious trucks and SUVs. The law called for a fleetwide average of 54.5 miles per gallon by the target window of 2022 to 2025, something automakers increasingly rebelled against. EPA administrator Scott Pruitt has not yet stated what the new standard will be.
While overall light-duty vehicle fuel economy has stayed pretty much stagnant over the past few years, it does so with a far greater proportion of light trucks in the mix. Turbocharging, direct injection, multi-cog transmissions and CVTs, and hybrid drivetrains have allowed consumers to purchase a new, larger vehicle with the same fuel economy of a smaller car from a decade ago. That greatly increased the appeal of crossovers and SUVs, but it hasn’t done anything good for cars like the Cruze.
The Cruze launched at a very opportune time. As the economy bounced back from the recession, gas prices soared, making the compact sedan’s 2010 debut a perfect time to tempt car-seeking Americans with a domestic automobile boasting far greater build quality and fuel economy than previous small Chevys. Sales peaked at 273,060 units in 2014, declining each year since.
Sales of the Cruze, now available in hatchback form and with an optional diesel engine, sank 13.4 percent in March. Year-to-date, Cruze sales are off last year’s tally by 26.1 percent.
Last week, GM announced a refreshed 2019 model.
[Images: General Motors]
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