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Chrysler Looking to Further Boost Jeep Production

“We need more,” says CEO Marchionne.

by on Nov.19, 2012

Marchionne's biggest problem at Chrysler, for now, is a shortage of capacity.

Chrysler is looking for ways to increase production of its Jeep models at a key plant in Toledo, Ohio.

Chrysler chief executive officer Sergio Marchionne says the company is looking for ways to increase production and may add even more to the already announced commitment to invest $500 million to re-tool the Toledo assembly complex.

Chrysler needs more production of vehicles such as the Jeep Wrangler, which is in particularly short supply, Marchionne said. “We need more of everything,” but especially Jeeps, he said, noting that Chrysler has seen 31 months of consecutive, year-over-year sales increases.

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Marchionne’s comments come in sharp contrast to the picture portrayed by Republican presidential candidate Mitt Romney during the final weeks of the 2012 campaign. Incorrectly interpreting a wire service report, the GOP nominee declared that Chrysler was going to transfer Jeep production from the U.S. to China, a claim that continued to be used on the campaign trail despite Chrysler’s efforts to correct the confusion.

“I feel obliged to unambiguously restate our position: Jeep production will not be moved from the United States to China,” Marchionne told Chrysler employees in an e-mail that was then distributed to the news media days before the election.

If anything, the Canadian-born executive stressed that ““North American production is critical to achieving our goal of selling 800,000 Jeep vehicles by 2014. In fact, U.S. production of our Jeep models has nearly tripled (it is expected to be up 185%) since 2009 in order to keep up with global demand.”

In a meeting with reporters last week, Marchionne Chrysler’s success over the past three years has left the company short of production in several areas – even after hiring 6,000 new production workers and re-opening or expanding several key plants since its emergence from bankruptcy in mid-2009.

“The numbers tell the story,” Marchionne said. “We will invest more than $1.7 billion to develop and produce the next generation Jeep SUV, the successor of the Jeep Liberty — including $500 million directly to tool and expand our Toledo Assembly Complex and will be adding about 1,100 jobs on a second shift by 2013.”

In all, Chrysler expects to implement additional shifts at four of its U.S. facilities, including the addition of a third shift at its Warren, Michigan, plant early next year.  A third shift was just launched at the Jeep plant along the Detroit riverfront.

“We keep on getting better and better at running lines,” he asserted. “We will take things full-out before we start spilling (over to Europe).”

Significantly, Chrysler keeps gaining sales and share in most of its key market segments – from small products like the Fiat 500 and Dodge Dart to big SUVs and pickups.

“We’re seeing very stable demand on the truck side and we think we’ve got some success and positioning in the product lineup with the Ram 1500,” Marchionne said. “I expect it to do really well.”

Chrysler is also getting ready to launch the diesel version of the Jeep Grand Cherokee. “I think it’s going to make a huge difference in the U.S. market. I think it will give diesel, finally, the proper chance to compete,” he said. “People have the wrong perception of what diesel is like.”

Marchionne also said he was optimistic about the reintroduction of Alfa Romeo. “I think it’s going to be quite receptive because the technology that we’re bringing to the U.S. market is advanced technology with all the requisites of Italian styling.”

“You’ve got to be very careful when you start looking at Fiat,” he said. “Fiat has got other businesses that (can generate money). All the premium brands – Ferrari, Maserati, all the components businesses.”

Chrysler’s strong performance since its 2009 run through bankruptcy court is proving especially important right now. Italian partner Fiat is struggling to reverse declining sales and falling profits back in Europe as that continent’s auto market collapses.  But Marchionne insisted there are some positive sides for Fiat.

“People keep on forgetting that we’re the biggest automaker in Brazil by far. That business makes over a billion Euros a year.”

Marchionne also said he was optimistic about the outlook for 2013. “I think the market will be a very good market. I think it will be a benign market,” he said. “It’s not just my year, but I think the other guys share a good level of optimism … I think the numbers that come in will be well in access of what 2012 was.”

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2 Responses to “Chrysler Looking to Further Boost Jeep Production”

  1. manousos1 says:

    Can I quote your:
    “Dodge Introduces High-Mileage Version of Dart
    2013 Dart Aero uses MultiAir 1.4, aero aids, weight-saving materials to achieve big fuel economy.
    by Bryan Laviolette on Oct.09, 2012 “

    “The Aero comes standard with the 1.4-liter MultiAir intercooled turbo engine making 160 horsepower. It features several aerodynamic enhancements, including active grille shutters, underbody aero kit, a lowered profile, low-rolling resistance tires and lightweight aluminum chassis components.”

    “The high-mileage Dart betters that of the Cruze Eco (26/39 mpg), 2013 Ford Focus SFE (28/40 mpg) and the 2013 Mazda3 Skyactiv (28/40 mpg) when all are equipped with an automatic transmission. But it falls just short of the Cruze Eco with a manual transmission, which is rated at 28/42.”

    “However, the Aero requires premium gasoline to achieve its lofty numbers, which negates its fuel economy advantage.”

    I don’t know what is the difference,
    in the States,
    between regular and premium,
    in terms of octane number (knocking resistance) and
    in terms of price.

    I know that the only reason this Engine of FIAT needs premium is because FIAT works it the WRONG way.

    This WRONG way Increases the TEMPERATURES and makes the engine Knocking
    even at partial /light loads, as the:
    http://www.pattakon.com/pattakonHydro.htm
    explains.

    • Paul A. Eisenstein says:

      Yes, you can use the quote in its full form. And it can not be taken as an endorsement or knock on anything but in the manner originally shown.

      As to premium v regular, we’re typically talking 91 to 93 octane instead of 87. And the price differential varies widely by state. If you go to GasBuddy.com you can get more specific information.

      Paul E.