GM Investment Is $500 Million For Chevrolet Cruze

GM has unveiled the 2011 Chevy Cruze, a car that the company says will deliver 45 mpg on the highway. The Cruze will be revealed at the Paris Auto Show this September, with European production starting next year. Expect US availability by Summer 2010.

Last week, General Motors took the wraps off of its Chevrolet Cruze compact, a car that the automaker expects will play a significant role in the company’s recovery as well as ensure the Chevrolet brand’s long term success. News media, auto analysts, GM management, as well as local and state government officials were on hand last for the car’s August 21st unveiling.

Big Investment For Ohio

Along with the news of the Cruze’s debut, General Motors announced a $500 million investment in the project, with $350 million slated for the Lordstown, Ohio plant, which will be the exclusive US facility building the car. Lordstown is located in the Buckeye State’s Mahoning Valley region, just one hour south of Cleveland and one hour west of Pittsburgh.

The stylish Cruze has coupe-like lines but it will be a four door compact slightly larger in size than the current Cobalt. Initially, it had been expected that the Cruze would replace the Cobalt, but GM is indicating that the Cobalt could remain with the Cruze being placed in a new slot between the Cobalt and the Malibu.

Class Leading Fuel Economy

Perhaps the most significant news about the Cruze is that it is expected to deliver 45 mpg on the highway, which would beat the best numbers for a gasoline powered car currently available in the US market. This means that even the tiny Smart Fortwo two-seater at 41 mpg would be displaced by a larger, heavier, and safer compact car. GM plans to use cutting edge engine and transmission technology to achieve the higher numbers including making available a six-speed automatic transmission, an option never before offered for a car of its size. Naturally, the advanced technologies will affect the Cruze’s price, though GM hasn’t said what that will be.

State Incentives = New Jobs

According to The Detroit News, the state of Ohio played a significant role in winning the Cruze. As recently as two years ago the Lordstown plants survival was in jeopardy with some fearing that GM would shift small car production to Mexico. Ohio offered tens of millions of dollars in tax breaks and incentives to woo GM, the United Auto Workers agreed to wage cuts and health benefits changes, and a shifting market toward small cars has resulted in increased demand for the Chevy Cobalt and Pontiac G5, two cars currently manufactured at Lordstown. Most recently, GM added a third-shift to the plant and hired 1400 new workers to expand production.

A Quick Burst Of News

General Motors has been on a dizzying PR campaign of late, announcing the Chevrolet Camaro’s production plans earlier this month, following that up with updated pictures of the Chevy Volt, and the introduction of the Cadillac CTS wagon, CTS coupe, and the next generation Cadillac SRX crossover. All of these projects added together will underpin what GM will look like by 2011.