GM Works Overtime to Produce the Chevy Cruze
General Motors (NYSE:GM) has cancelled a planned weeklong vacation for its Chevrolet Cruze plant in Lordstown, Ohio. A spokesman from the company told Reuters that demand for the Cruze has been so high that the plant shutdown planned for the week of August 26 has been cancelled, and employees will work that week as usual.
“Sales have been brisk,” GM spokesman Annalisa Bluhm told Reuters. “We didn’t want to lose momentum so we decided to abstain from taking the week off.”
The union United Auto Workers Local 1112 said the plant was scheduled to be closed for vacation the week of August 26. The union’s website says: “GM has just announced that the previously scheduled Lordstown Assembly downweek of August 26, 2013 has been cancelled. We will be producing Chevy Cruzes as normal during that week. There will be no downtime in August.”
The plant in Lordstown employs 4,500 people and has been making the Cruze since September 2010. U.S. sales of the Cruze have been through the roof this summer, with a 70 percent increase in sales for July alone. In the first seven months of the year, the Cruze’s sales have gone up 24 percent.
GM has been erring on the side of caution after coming out of bankruptcy in 2009. Earlier this week, sources familiar with the company told Reuters that GM was planning to gradually pull production out of South Korea, as the cost of labor there has turned the country from a low-cost base to a high-cost base over the past 10 years, with the cost of employee compensation in the manufacturing sector rising 119 percent during that time. The company also said it would not be giving investors dividends this year, as it will use that money to develop new products.
Overall, U.S. auto companies having been gaining on their foreign competition, especially in the compact car sector. In addition to the success GM has had with the Cruze, Ford’s (NYSE:F) competing Fusion model has outstripped Toyota Motor Corp.’s (NYSE:TM) Corolla in sales, according to data from R.L. Polk analyzed by Ford. The Cruze has outsold the Corolla thus far this year as well, according to Bloomberg.
GM announced at the beginning of the month that it was down to a 50-day supply of the Chevrolet Cruze vehicle. The company usually tries to keep a 68-day supply of its overall lineup, which is why employees at Lordstown won’t be getting their planned vacation.
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