General Motors to Build New Compact Sedan for Buick

Buick still struggles with a brand image that seems more senior than youthful. But the General Motors division will take another step to reverse that stigma in 2012 when it begins selling a new compact sedan, according to news reports.

Based on the recently introduced Chevrolet Cruze compact car, built in Lordstown, Ohio, the new Buick Verano will be assembled at a former Pontiac plant in Orion Township, Mich., GM is expected to announce Thursday.

Building the more upscale Verano separately ensures GM can meet demand for Cruze models, The Wall Street Journal reported.

The Verano, Spanish for summer, would be Buick's first compact car since the Skylark ceased production in 1998. Adding an additional fuel-efficient four-cylinder car to Buick's product mix should help GM boost its corporate-wide fuel economy average.

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The Orion plant will also build the forthcoming Chevrolet Aveo subcompact car, and an even smaller Chevy model, the Spark, in 2012, as part of GM's bid to offer a greater variety of fuel-efficient vehicles.

GM said previously it would restore about 1,200 jobs at the Orion plant, which built its last Pontiac model last year after the brand was shutdown as part of GM's restructuring, following a government-sponsored bankruptcy. The federal government holds a 61% stake in the automaker, which is expected to once again begin selling shares publicly shortly after November's midterm elections.

Once it's running, the Orion plant is expected to employ workers on two shifts, building about 160,000 vehicles a year, The Detroit News reported. The newspaper noted, however, that not all recalled workers will return at full pay.

As part of a deal struck between United Auto Workers and GM management, employees with less seniority, comprising about 40% of the workforce, will make about half of the $28 an hour that more senior assembly line workers will earn.

Last week, GM reported Buick's September sales rose 36% above year-ago levels, compared to a corporate-wide sales gain of 10.5%. Driven in part by strong demand for its recently introduced Regal and revamped Lacrosse sedans, Buick sales have risen 58% so far this year.