The two new models of Chevrolet’s Malibu that will start rolling off the assembly line in Kansas later this year demonstrate General Motors’ “new focus on the car market,” Gary Cowger, president of GM’s North American operations, said at a press gathering at the plant, according to Associated Press (AP).
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AP said GM will have spent six months and more than $US500 million getting the plant in Kansas City’s Fairfax Industrial District ready before workers start producing cars for consumers on August 11. Until February, the plant made the Pontiac Grand Prix.
The Fairfax plant will make the new Malibu and the Malibu Maxx, a hatchback scheduled to be unveiled next week in New York, AP said.
What used to be the Malibu has been renamed the Chevy Classic and is built in Lansing, Michigan.
According to AP, GM plans to build 265,000 Malibus a year at the Fairfax plant. In 2002, GM sold more than 169,000 Malibus and 130,000 Grand Prixs. GM has not said how much the redesigned Malibu will cost, AP noted, but executives told the news agency it would be comparable to the price of the 2003 Malibu.
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By GlobalDataAP said the Fairfax plant shut down in February and has been undergoing an extensive retooling as it changed to the Epsilon manufacturing system, which allows GM to “build multiple products off of the same architecture,” according to Troy Clarke, vice president of manufacturing and labour relations. GM moved production of the Grand Prix from Fairfax to a plant in Canada, AP added.
Some workers have helped retool the plant, but most Fairfax employees were laid off during the shut down, AP said. Those workers will begin to return to work in June, but a few are not expected back until next April.
AP said GM is making the investment even as the US motor industry faces sluggish sales and rising competition in its domestic market.
AP noted that the credit ratings agency Standard & Poor’s on Wednesday lowered its outlook to negative from stable on debt issued by GM.
According to AP, S&P credit analyst Scott Sprinzen cited cyclical weakening demand in the North American market, intense pricing pressures, expected weakening of light-truck profitability, market share gains by foreign competitors and growing pension liabilities.
AP said Cowger acknowledged the “fiercely competitive” market, especially when it comes to mid-size cars, but said that making new products was “crucial” to GM’s success.
Cowger also said the company was focused on “product, product, product,” and planned 16 “all new” vehicles this year, with double-digit launches also planned next year, AP added.
According to AP, Clarke said GM is able to launch so many new vehicles because of its global manufacturing system, which has reduced the complexity of vehicles, allowed the company to use the same components in different cars and enabled GM to reuse equipment.
Clarke also said GM saved $60 million in 2002 by reusing equipment and has saved $4 million at the Fairfax plant alone, Associated Press reported.
