With Car Demand Falling, GM Plans to Cut 1,500 Jobs at Chevy Cruze Assembly Plant in Ohio
GM plans to cut 1,500 jobs at its plant in Lordstown, Ohio
Up to 1,500 workers could be laid off or bought out in June when General Motors ends the second shift at its plant in Lordstown, Ohio.
The Lordstown plant, located in northeast Ohio near Youngstown, currently employs 3,000 workers. Last year, its third shift was cut, costing 1,000 jobs.
The cuts are in response to slowing demand for the Chevy Cruze compact car, which is assembled at the Lordstown plant.
From 2011 to 2014, Cruze sales went up each year, with more than 273,000 sold in 2014. With gas prices high, the Cruze’s fuel efficiency made it an attractive option.
Although the Cruze has won many awards — including honors from J.D. Power, Consumer Reports, and the NHTSA — sales started dropping in 2015. In 2017, only about 151,000 Cruzes were sold. And so far this year, Cruze sales are down over 26%.
With gas prices falling, vehicle buyers have switched to purchasing larger vehicles. According to Kelley Blue Book, 29.2% of market share in 2017 belonged to non-luxury cars, while 35.1% belonged to non-luxury crossovers and SUVs. Compare that to 2012, when cars’ market share was 40.9% and crossovers/SUVs had just 25.6%.
Chevy Cruze sales have been falling despite the car’s fuel efficiency and many awards
With less market share going to compact sedans, the Cruze has also faced increasingly tough competition from other established favorites like the Honda Civic and the Toyota Corolla.
“As we look at the market for compact cars in 2018 and beyond, we believe a more stable operating approach to match market demand is a one-shift schedule,” GM said in a statement.
The upcoming cutbacks at Lordstown are likely to have a ripple effect in the northeast Ohio region. Plants that supply the GM factory will likely have to adjust by cutting jobs as well.
News Sources: The Vindicator, Detroit Free Press
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