September 1, 2011
CLEVELAND, Ohio -- About 4,500 GM autoworkers in Lordstown will be working some unexpected extra hours as General Motors struggles to keep the popular Chevrolet Cruze on dealer lots.
"That's the demand that's out there," said GM spokesman Tom Mock. "We're building them as fast as we can."
Working Saturday overtime shifts is common at some auto plants, but GM didn't expect to have to use the expensive option in Lordstown so soon. Veteran workers will get about $42 an hour in time-and-a-half wages. Newer workers will earn about $22 an hour on the overtime shifts.
Before the Cruze went into production, the company last year added a third shift to Lordstown, allowing it to effectively run 24 hours a day from Monday through Friday. All three of those shifts will report on Sept. 10 and Sept. 17.
Adding a third shift was a leap of faith that paid off for GM. That shift let the plant produce more than 26,000 vehicles in March, April, May and June. With the Chevy Cobalt, the Cruze's predecessor, the Lordstown plant rarely produced more than 20,000 vehicles a month. Last year, the plant had about 3,300 workers and it averaged fewer than 14,000 vehicles per month.
"There's definitely a shortage" of Cruze models on dealership lots, said Steve "Zap" Zapotechne, owner of Brunswick's eInventoryNow.com, an Internet-based business that lets GM dealers swap cars with each other. Zapotechne monitors GM's inventory levels and said the Cruze has been in short supply since April.
GM typically tries to keep enough cars at dealerships to last about two months. That 60-day supply ensures that shoppers will have wide selections of colors and options. In January and February, Cruze inventories were at about that level, but by March, supplies fell to about 42 days worth of cars, Zapotechne said.
Going into last month, the March numbers would have been welcome. GM started the month with about 25,000 Cruze models on lots nationwide - a 27 days supply, based on Zapotechne's numbers.
Strong sales in May, June and July, coupled with the traditional two-week plant shutdown in July sapped inventories. Automakers try to make extra cars in May and June to prepare for the shutdowns, and GM tried with the Cruze, increasing production sharply.
But strong sales this spring and summer meant those extra Cruze models went to dealer lots, not into storage for July.
Jim Cain, a spokesman for GM's Chevrolet brand, said the company tries to match plant production with market demand, but Lordstown can't produce vehicles fast enough.
"It's a good problem to have," Cain said. The automaker plans to release August sales figures on Thursday, and Cain said it expects the Cruze to top the 20,000-vehicle mark for the fourth consecutive month. And that's not including the several thousand models that got to Canada and Mexico each month.
The Cruze has been the best-selling compact in the country since May and was the best-selling car of any size in June.
Chevrolet is not likely to hold onto that sales crown for much longer as Toyota and Honda have almost completely recovered from the earthquakes and tsunami in Japan and are returning to full production.
Toyota has produced more than 40,000 Corolla models in the past in plants in the United States, Canada and Japan. It and Honda have far more capacity to build their small cars than does GM.
Still, Cain said he expects the Cruze to continue selling well - easily beating the lackluster numbers posted by the Cobalt.
"We're more than pleased by what this car's done so far," Cain said.