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How GM's Chevrolet Cruze Started an Auto Revolution

Stocks in this article: F GM HMC TM

DETROIT ( TheStreet) -- As automakers celebrate their best month in six years, a sign of the revival of the U.S. auto industry, one car stands out as a symbol of all that has gone right.

That car is GM's (GM - Get Report) Chevrolet Cruze. It was introduced on Sept. 8, 2010, three years ago Sunday, as a sort of impossible dream, a compact car made in the U.S. by one of the problem-plagued Detroit Three automakers.

In those days, Ford (F - Get Report), GM and Chrysler were all still pickup truck companies that also made cars -- too many cars, made at too high a cost at many plants with too many workers and too many imperfections, then sold at too many dealers. No wonder Chrysler had filed for bankruptcy protection in April 2009 and GM had followed in June, while Ford had brought in a miracle worker CEO from outside the industry and then mortgaged the farm to borrow $28 billion.

GM said Wednesday that its August sales were its best since September 2008, the month when Lehman Brothers filed for bankruptcy protection. Two years later, GM rolled out the Cruze. "What really got the ball rolling was the launch of Cruze, which went into production three years ago (nearly) to the day," said Kurt McNeil, vice president for U.S. sales operations, on the GM sales call.

"Cruze is emblematic of GM's progress on many fronts," McNeil said. "We replaced a competitive car with a great car that was a much better value." (Yes, McNeil did indeed refer to the Chevrolet Aveo as "a competitive car."). Since then, GM has sold about 677,000 Cruzes and has "replicated that success with other global products such as Spark, Sonic and more," McNeil said.

Alan Batey, senior vice president, Global Chevrolet, said Mark Reuss, president of GM North American, should be credited for Cruze. Reuss "was convinced that we had to have success for Chevrolet -- we needed not to compete, but to win," Batey said. "This was a very important launch, important to dealer morale in the future, and we've been able to spin off that. It was a defining moment.

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