UPDATE 2-GM to make next generation Chevrolet Cruze in Mexico
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By Joanna Zuckerman Bernstein and Ben Klayman
MEXICO CITY/DETROIT, March 23 (Reuters) - General Motors Co will build its next-generation Chevrolet Cruze small car in Mexico, the company said on Monday, as automakers look to expand there to take advantage of low labor costs and free trade agreements.
GM will invest $350 million to produce the Cruze at its plant in Coahuila, as part of the $5 billion investment in its Mexican plants announced last year.
GM also said it will continue manufacturing the model at its factory in Lordstown, Ohio. GM so far has identified only three plants globally that will make the next-generation Cruze, including in China.
A GM spokesman in the United States said the company's assembly plant in Gunsan, South Korea, will continue to build the current Cruze model to meet demand in domestic and export markets. However, as part of a new wage deal last summer, GM agreed to build the next-generation Cruze in Korea starting in 2017, according to a GM proposal seen then by Reuters.
Automakers are looking to move to Mexico for its low labor costs and access to the U.S. market. Toyota is finalizing plans for its first passenger car assembly plant in Mexico, people familiar with the matter previously said. Volkswagen recently announced a $1 billion investment in its Puebla plant.
It is the first time the Cruze will be made in Mexico, a GM spokeswoman in Mexico said, and production will be mainly for the domestic market. The Cruze is currently imported to Mexico from GM's plant in South Korea, she said.
GM has encountered tensions with its South Korean workers. Continuación...