UPDATE 2-Future Chevy Cruze leads new GM global program-sources

Fri Aug 24, 2012 1:08am IST

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* Next-generation Cruze due in fall 2014 as 2015 model

* First model to use new GM global compact platform

* 2.5 mln vehicles a year may use D2XX platform by 2018

By Paul Lienert and Bernie Woodall

Aug 23 (Reuters) - The next-generation Chevrolet Cruze, due in fall 2014 as a 2015 model, will be the first vehicle to use a new General Motors Co global platform that could underpin nearly 2.5 million GM compact sedans and crossovers a year by 2018, several sources said.

GM would not confirm plans for the new platform, which will combine two existing platforms for compact models, one for sedans and one for crossovers.

The new global platform will be used as the foundation for a wide range of compact vehicles that will be sold under various GM brand names, including the successors to the Chevrolet Volt, the Chevrolet Equinox and the Opel Astra, said two sources who work directly with parts suppliers and declined to be identified.

GM announced on Thursday that the next-generation Cruze will be built in Lordstown, Ohio, where the current model has been assembled since September 2010. GM has produced more than 1.6 million Cruze compacts around the world since early 2009.

GM said it will invest $220 million at Lordstown and at its Parma, Ohio, metal center, where many parts of the Cruze are made. Most of the money will be spent on new tooling and equipment, GM said.

Maintaining Cruze production at Lordstown and Parma will keep about 5,000 jobs at the two plants, including 4,500 at Lordstown, GM said.

A United Auto Workers official said that while GM did not say how long it will extend production at Lordstown, he suspected it would be until 2019 or 2020, based on the five- to six-year life cycle of a new or completely redesigned vehicle.

The Lordstown plant is expected to begin building the 2015 Cruze in the third quarter of 2014, about the same time a GM plant in Korea will begin building a sister model for Asian markets, confirmed a GM company source who asked not to be identified.

Other vehicles that will share the same basic parts as the new Cruze include replacements for the Buick Verano and the GMC Terrain, as well as the successor to the upcoming Cadillac ELR hybrid.

The platform - essentially a flexible set of underbody components that includes wheels, tires, brakes and suspension - carries the internal GM designation D2XX, according to the two sources familiar with the program.

Development of the D2XX platform is a critical part of GM's ongoing consolidation of its global vehicle platforms in an effort to reduce manufacturing complexity and cost. It will combine two current GM platforms - the Delta II platform, which underpins the 2012 Cruze and Volt, and the Theta platform, which is the base for the 2012 Equinox.

A GM spokesman declined to acknowledge the existence of the D2XX program.

The automaker acknowledged that the next-generation Cruze will be completely redesigned inside and out, with a larger trunk and roomier passenger compartment. It will also provide better fuel economy, GM said.

The new investment by GM is comforting to the many Lordstown workers who were transferred there from GM and Delphi Automotive plants across the United States, said Dave Green, president of United Auto Workers union Local 1714, which represents workers at Lordstown. More than half of the 1,500 hourly body shop and stamping workers he represents were transferred from other plants.

In the latest UAW-GM national contract ratified last fall, the automaker did not make a commitment to keep Cruze production at Lordstown, which opened in 1966. The plant was the site of labor strife dating to the early 1970s, when the compact Chevrolet Vega was produced there.

"The fact that the Cruze is going to stay here is huge," said Green told Reuters. "This gives peace of mind to all of the workers here, and it's good for the local area because the GM plant means so much."

The plant is near Youngstown, Ohio. The Parma plant is near Cleveland.

Other GM plants in Europe, Asia and South America will ramp up production of the new Cruze and companion vehicles in 2015, with the rollout of the new models expected to be mostly complete by late 2016, the two sources said.

Global production volume of the D2XX-based compacts is expected to top 2 million units a year in 2016 and could climb to nearly 2.5 million by 2018, they said.

The Cruze and various derivatives for local markets are built at a variety of GM plants around the globe, including China, Russia, India, Brazil, South Korea, Thailand and Australia.

The U.S. market was virtually the last to get the current model, which was launched initially in South Korea and Australia in late 2008, but not introduced in the United States until fall 2010 as a 2011 model.

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