Sonic Helps GM Take Automaking To The Next Level
Soon, the only subcompact car manufactured in the USA will roll out of an assembly unit located in Detroit which is as unexpected as the vehicle itself.
The space occupied by the production line is half of the space used by a traditional plant. To streamline the activity all the robots are placed in efficient clusters and not along the line as they used to be placed. The workers are paid with half of the typical union wage. A well known axiom of the auto industry says that no company can manufacture a subcompact vehicle in the USA and actually make money because these cars have a low price. For example, the Ford Fiesta is manufactured in Mexico and the Honda Fit is built in different countries including Brazil and China.
Considering that Americans have to face these days higher gas prices, General Motors comes with a solution for all these problems by releasing the new Chevrolet Sonic. This car offers to General Motors the opportunity to enter in the “lower tier” of the car market in the fall when the Sonic is expected to become available for sale and in the same time it will consolidate the cooperation between United Automobile Workers (U.A.W) and Detroit.
The local factory operates with few and cheap workers, many of them paid with $14 an hour (less than the full U.A.W wage of $28 per hour). This plant is smaller and created to save money by following the changes made by GM in its most efficient factories located in Korea and Germany. The factory is placed on 500,000 square feet, half of the traditional space usually used, and is able to reduce the energy bill by using methane gas to power up some of the operations necessary. This plant will also be used to manufacture the Buick Verano in order to increase the small revenue they will obtain by producing the Sonic. The work shifts are set at ten hours per day during four days for the purpose of reducing the wear and tear of the equipment.
The Chevrolet Sonic has a small size and will be the most fuel-efficient vehicle available on the market. It was designed in 2008 before the bailout offered by the federal government to save the bankrupt manufacturer. During the discussions, the company’s and union’s negotiators discussed the possibility to build a profitable subcompact vehicle in the USA rather than opt for low-wage states.
The Ford Motor Company was also asked by U.A.W to build the Fiesta subcompact in the USA, but the company picked Mexico, because there the combined wages and revenues of a production worker are worth around $10 per hour. GM has to pay in the USA around $60 per hour for a full-wage union member. In addition, the entry-level wage is around $30 per hour including wages and benefits.
Now all the pressure is on the Chevrolet Sonic which must impress the American customers and conquer the subcompact car market. Will it succeed?11