Story

Published: Tuesday, February 6, 2007

Is an Astra in Lordstown's future?

Print Story

Email to Friend

Discuss this story

The Valley's auto plant would need fewer workers if it builds only the Saturn Astra.

By DON SHILLING

VINDICATOR BUSINESS EDITOR

The Lordstown car plant has a good chance of landing the Saturn Astra, analysts say. General Motors Corp. is calling the Astra a sporty performance car as it prepares to unveil it to the U.S. market at the Chicago Auto Show today.

Analysts expect GM to move production from Belgium to North America because of high labor rates in Europe and shipping costs, but Brian Brockman, a Saturn spokesman, said no decision has been made.

Sean McAlinden, vice president of research at the Center for Automotive Research in Ann Arbor, Mich., said Lordstown is likely to be awarded the Astra, but only if GM's board of directors decides to continue making small cars in the U.S.

McAlinden said GM has been losing money on its Lordstown-built Chevrolet Cobalt and many board members are pushing to give up on producing small cars in the U.S. Company executives, however, have been saying they can turn a profit under the right conditions, he said.

Factors

Negotiations on a new labor contract this year will go a long way to determine if conditions are right, he said. GM will need concessions from the union to bring its labor costs down, he said.

Another factor that could produce the right conditions for turning a profit is a higher-priced small car, he said.

The Astra is expected to fit that bill. GM hasn't released prices, but analysts expect the car to start at under $20,000 but sell at about $22,000 with common options.

McAlinden said the Astra has "an incredible suspension and handling" and called it the best compact car that GM has had in North America.

"If you are going to spend $22,000, you expect a hell of a small car," he said.

Erich Merkle, an analyst with IRN in Grand Rapids, Mich., also called the Astra an impressive car. He drove the car in Europe and said the interior is superior to Chevrolet products and the quality showed in the fit and finish — the way pieces of the car fit together.

Looking good for Lordstown

Merkle said industry talk lately in Detroit indicates that Lordstown's chances are very good at landing the Astra.

If Lordstown succeeds, production of the Astra probably wouldn't begin for two or three years because some changes to the plant would be needed, he said. The underpinnings of the cars are slightly different because GM had used different small-car platforms in Europe and North America.

In the meantime, GM will ship cars from Belgium because it wants Saturn to have more products, he said. Brockman said Astras will be sold in this market late this year.

GM has committed to building the Cobalt in Lordstown only until the summer of 2009. GM spent $1 billion to renovate the Lordstown complex in advance of launching the Cobalt in 2004 as a "premium small car."

Merkle said the future of the Cobalt is up in the air, but his guess right now is Lordstown will end up producing Chevy and Saturn models.

McAlinden said he thinks Cobalt production in the U.S. will end in 2009 because it is priced too low to make a profit. GM wants to produce "upmarket" cars to distinguish its models from less-expensive cars coming from Korea and soon from China, he said.

Reduced work force

The Lordstown work force would be cut even more if only the Astra is made there, he said. About 1,600 hourly workers accepted buyouts and early retirement incentives last year, leaving 3,700 on the job.

Fewer workers would be needed because Astra, with its higher price, would sell in lower numbers, perhaps around 100,000 a year, he said. GM sold about 211,000 Cobalts last year and about 8,000 Pontiac G5s in the half year that the Cobalt's twin was on the market.

Reductions to the work force could be lessened, however, if a strong-selling Pontiac version of the Astra is introduced, McAlinden said. It also would help if the Chevrolet Astra is sold in this country and made in Lordstown, he said.

GM has said that car, which will be a less-expensive version of the Saturn Astra, will be built at a new $660 million plant in Mexico and sold in that country and Latin America.

On the other hand, just the existence of that plant is a threat to Lordstown, McAlinden said. GM hasn't announced any plans to make cars there for the U.S. market, but other Mexican plants are producing cars for the U.S. and Canada, he noted.

As for the Saturn Astra, GM said it will come in two-door and four-door models, both with hatchbacks.

The four-door version will have two trim levels, while the two-door will have one trim level that's designed for "enthusiastic drivers," GM said.

The front and rear of the cars have been redesigned for the North American market in order to meet bumper standards.

shilling@vindy.com

Tuesday, February 6, 2007