GM Invests $220 Million in Next Chevy Cruze, Despite Recall, Sales Drop

General Motors will continue to depend on plants in Lordstown and Parma, Ohio for the manufacture of the Chevrolet Cruze. The company announced that it would invest $220 million in retooling the plants in preparation for producing the next-generation Cruze, ensuring that 5,000 jobs would be retained.

Since the Cruze went into production in September2010, 500,000 have been produced at the Lordstown Complex, with key metal components coming from Parma. GM did not say when it would begin production of the next Cruze, but The Detroit Free Press predicted that it would be in 2014 or 2015.

"Thanks to northeast Ohio's supportive business climate, we're able to build on a great foundation and steer the Chevrolet Cruze into the next generation."  GM Manufacturing Manager Arvin Jones said in a statement. "A special thanks goes to Governor John Kasich and his team at Jobs Ohio for their strong leadership and advocacy for GM and our employees."

GM says that it has invested more than $7.3 billion in its US facilities since 2009.  

"The men and women of Lordstown are working hard to keep the Cruze a top-quality small car choice," UAW Local 1112 Shop chairman Ben Strickland and UAW Local 1714 Shop chairman Will Adams said in a statement. "The next-generation of the Cruze is well earned and we are thrilled to be assigned work that will keep good-paying next generation UAW jobs in the state of Ohio for years to come."

GM said that the next-generation Cruze would feature improved fuel economy and storage space. The 2012 Cruze was voted "America's Best Compact Car for the Money" by US News and World Report.

Still, the Cruze has had its problems. As the Press notes, the model saw its sales fall 12.7 percent in the first seven months of the year; though this might have been the inevitable follow up to a sales spike that occurred when the natural disasters in Japan created low inventory among the Cruze's competitors. GM has also begun providing fewer cars to rental fleets, which the paper says are less profitable for it.

The Cruze was also the subject of a recall, The New York Times points out. More than 475,000 were recalled in Canada and the US in June, owing to a fire hazard created by oil spillage on plastic engine shields.