General Motors Company
) plans to pump $220 million in its northeast Ohio facilities in
order to manufacture the next generation Chevrolet Cruze compact
car. The investment will preserve more than 5,000 jobs at the
plants located in Lordstown, Ohio and Parma near Cleveland.
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The revamped Cruze will be equipped with new styling, nicer
interior and better gas mileage than the existing version that
delivers 35 to 42 miles per gallon on the highway. The existing
version of Cruze is the second-best selling car of GM with nearly
129,000 units sold so far this year.
GM has not mentioned the production date of new Cruze. The
company's Lordstown plant began producing Cruze in September of
2010 and built 500,000 units of the car since that time. On the
other hand, the Parma Metal Center delivered 60 million parts and
processed more than 1,000 tons of steel per day in 2011 to cater to
majority of GM vehicles manufactured in North America.
GM has invested more than $7.3 billion in its U.S. facilities since
2009. In May last year, the company had initiated its investment
plan of $2 billion, targeting 17 assembly and components plants in
8 states for 18 months in the U.S. Through the investment plan, the
automaker intended to create or preserve more than 4,000 hourly and
salaried jobs at the plants.
GM, a Zacks #3 Rank (Hold) company, reported a sharp 41% fall in
profits to $1.49 billion or 90 cents per share in the second
quarter of the year from $2.52 billion or $1.54 in the same quarter
of 2011. Nevertheless, profits exceeded the Zacks Consensus
Estimate by 15 cents per share.
Revenues in the quarter fell 4.5% to $37.61 billion, which is lower
than the Zacks Consensus Estimate of $37.98 billion. Unit sales
rose 3% to 2.39 million vehicles from 2.32 million vehicles in the
second quarter of 2011. The automaker occupied a worldwide market
share of 11.6% during the quarter, down from 12.3% a year-ago.
The decline in profits and revenues was attributable to
strengthening of U.S. dollar against most of the major currencies
as well as weak macroeconomic conditions globally, especially in
Europe and South America.
Meanwhile, GM's cross town rival
Ford Motor Co.
) posted a 39% fall in profits of $1.20 billion or 30 cents per
share in the second quarter of the year from $1.98 billion or 49
cents in the corresponding quarter of 2011 due to lower operating
results in all the regions except North America. However, the
company's profits were higher than the Zacks Consensus Estimate of
28 cents per share.