GM puts Cruze production on hold due to a problem with a suspension strut.
Automakers will do almost anything to avoid slowing or, worse, shutting down an assembly plant. And that’s doubly true when that factory is rolling out a product as hot as the Chevrolet Cruze which has, in recent months, been running at or near the top of the U.S. passenger car sales charts.
But production has, indeed, been idled temporarily at the Lordstown, Ohio assembly plant producing the compact Cruze because of problems with a key supplier. Production of the new Buick Verano – which shares the same basic platform as Cruze – has also been put on hold.
The maker has acknowledged the problem is due to the quality of parts provided by a supplier, which a company official said could impact customer satisfaction. “We are working with the supplier to resume production as quickly as possible,” added a formal GM statement.
Though GM declined to provide details, it appears the problem involves a defect with a suspension strut produced by the Canadian mega-supplier Magna International, according to a report by Deutsche Bank analyst Rod Lache.
The maker said the shutdown isn’t expected to go for long. Nonetheless, it’s a tough situation for GM to swallow considering that the Cruze is currently its second best-selling model, behind the Chevrolet Silverado pickup. And the compact sedan has, at times, outsold even some of its toughest rivals this year, including the Toyota Corolla.
For the first 11 months of the year Cruze is only 4,000 units behind Corolla, the perennial compact chart-topper. The Chevy is ahead of Ford’s competing Focus model, however.
The move impacts 4,500 workers at the Lordstown plant, a factory that has had a series of ups-and-downs over the years. Many of its problems were quality related, notably with the troubled Chevy Vega that helped launch the factory four decades ago.
But GM officials have made a point of saying they will not sacrifice quality in order to maintain sales. That’s beginning to ring true based on recent surveys that show a steady increase in the maker’s overall quality – largely due to the significant improvements in recently launched products like Cruze.
GM’s willingness to accept a shutdown sends a message to those inside the company, suppliers — and to consumers — that it takes the issue of quality seriously, suggested one industry analyst.
The impact on sales of the temporary shutdown may prove to be minimal, anyway. Production at the Lordstown facility has been running about 1,000 a day – most of that the Cruze. According to an analysis by Deutsche Bank Chevy dealers have about 77 days of inventory on hand, or 46,000 units, more than enough to whether the current storm, said DB analyst Rod Lache.
“December sales should not be impacted,” said Lache, nor will this have a material impact on GM earnings – though it could cause a problem for supplier Magna.