Fiat Chrysler ending car production in U.S
07-28-16, 11:58 AM
#1
Fiat Chrysler ending car production in U.S
Another one bites the dust....
http://www.usatoday.com/story/money/...n-us/87649136/
Quote:The company may be called Fiat Chrysler Automobiles, but by early next year, it won't be making automobiles in the U.S.
Instead, Fiat Chrysler's U.S. plants will be focusing entirely on pickups and SUVs for the Ram and Jeep brands.
Fiat Chrysler is winding down production of the Chrysler 200 and Dodge Dart and will primarily produce Jeep SUVs and Ram pickups in the U.S. The company's remaining car models will be made in Mexico, Canada or other foreign nations.
Ending passenger car production in the U.S. is part of CEO Sergio Marchionne's multibillion-dollar plan to increase profit margins to match competitors. It's a bet that recognizes the growing popularity of SUVs in America, low gas prices and lower cost of producing vehicles in Mexico.
"By the time we finish with this, hopefully, all of our production assets in the United States if you exclude Canada and Mexico from the fold all those U.S. plants will be producing either Jeeps or Ram," Marchionne said Wednesday during a conference call with Wall Street analysts after the automaker reported second-quarter earnings.
The Jeep and Ram brands have been driving sales gains recently, with the Dodge Dart and Chrysler 200, highly touted when they were launched, have been disappointments.
"There will be no passenger cars that will be produced in the U.S., and therefore, our expectation is that concentration will give us the possibility to get very close" to the 12.1% profit margin that General Motors reported as part of its second-quarter earnings last week.
Marchionne has been trying for years to increase its North American profit margins and match crosstown rivals Ford and General Motors. His realignment will help the automaker finally reach that goal. That plan also includes moving production of the replacement for the Jeep Compass and Patriot to Mexico.
"I think our biggest task now is to close the operating margin gap with our competitors. That remains a permanent fixation that we have inside the house," Marchionne said. "I think we will be de-carred in the U.S. by (the first quarter) of 2017."
We're looking at some historic vehicles over the years from what is now Fiat Chrysler Automobiles. This is the car that inaugurated streamlining, the 1934 Chrysler Airflow
A major piece of the puzzle is shelving the Chrysler 200 in Sterling Heights. The automaker said earlier this week production will end there in December.
On Tuesday, FCA announced that it plans to spend $1.49 billion to retool its Sterling Heights, Mich., Assembly Plant to make the Ram 1500, which will move from its current plant in Warren when production begins in 2018.
Another piece of the plan is to move production of the Jeep Cherokee from Toledo, Ohio, to Belvidere, Ill., so it can expand production of the Wrangler in Toledo. FCA said last month it plans to spend $1 billion to retool its plants in Toledo, Ohio, and Belvidere, Ill., and create 1,000 new jobs.
UAW President Dennis Williams who has frequently criticized automakers for moving production to Mexico said Tuesday that FCA's recent investments were discussed last year as part of the union's contract negotiations.
The Sterling Heights investment "is great for all of our members and all of the employees at FCA and for the local communities," he said.
In negotiations with the Detroit Three last fall, the UAW won raises for entry-level members hired after 2007, moving most to about $29 per hour from $19.28 over the next eight years.
That agreement, combined with other benefits, erodes the ability of the Detroit Three to make a profit off lower-priced small cars in the U.S.
"When you look at the economics of car manufacturing ...the margins that we were getting from our experience of both the Dart and the Chrysler 200 ...yielded returns that would not, on a competitive basis, match even anything close or remotely close to what we could derive from utilization of those assets in the Jeep or Ram world. So we have made that shift," Marchionne said.
Despite FCA's plans to stop producing the Dart and Chrysler 200, Marchionne continues to say he is looking for a partner willing to make those cars for the automaker.
I think we have made progress. Were not in a position to announce anything," Marchionne said.
http://www.usatoday.com/story/money/...n-us/87649136/
Quote:The company may be called Fiat Chrysler Automobiles, but by early next year, it won't be making automobiles in the U.S.
Instead, Fiat Chrysler's U.S. plants will be focusing entirely on pickups and SUVs for the Ram and Jeep brands.
Fiat Chrysler is winding down production of the Chrysler 200 and Dodge Dart and will primarily produce Jeep SUVs and Ram pickups in the U.S. The company's remaining car models will be made in Mexico, Canada or other foreign nations.
Ending passenger car production in the U.S. is part of CEO Sergio Marchionne's multibillion-dollar plan to increase profit margins to match competitors. It's a bet that recognizes the growing popularity of SUVs in America, low gas prices and lower cost of producing vehicles in Mexico.
"By the time we finish with this, hopefully, all of our production assets in the United States if you exclude Canada and Mexico from the fold all those U.S. plants will be producing either Jeeps or Ram," Marchionne said Wednesday during a conference call with Wall Street analysts after the automaker reported second-quarter earnings.
The Jeep and Ram brands have been driving sales gains recently, with the Dodge Dart and Chrysler 200, highly touted when they were launched, have been disappointments.
"There will be no passenger cars that will be produced in the U.S., and therefore, our expectation is that concentration will give us the possibility to get very close" to the 12.1% profit margin that General Motors reported as part of its second-quarter earnings last week.
Marchionne has been trying for years to increase its North American profit margins and match crosstown rivals Ford and General Motors. His realignment will help the automaker finally reach that goal. That plan also includes moving production of the replacement for the Jeep Compass and Patriot to Mexico.
"I think our biggest task now is to close the operating margin gap with our competitors. That remains a permanent fixation that we have inside the house," Marchionne said. "I think we will be de-carred in the U.S. by (the first quarter) of 2017."
We're looking at some historic vehicles over the years from what is now Fiat Chrysler Automobiles. This is the car that inaugurated streamlining, the 1934 Chrysler Airflow
A major piece of the puzzle is shelving the Chrysler 200 in Sterling Heights. The automaker said earlier this week production will end there in December.
On Tuesday, FCA announced that it plans to spend $1.49 billion to retool its Sterling Heights, Mich., Assembly Plant to make the Ram 1500, which will move from its current plant in Warren when production begins in 2018.
Another piece of the plan is to move production of the Jeep Cherokee from Toledo, Ohio, to Belvidere, Ill., so it can expand production of the Wrangler in Toledo. FCA said last month it plans to spend $1 billion to retool its plants in Toledo, Ohio, and Belvidere, Ill., and create 1,000 new jobs.
UAW President Dennis Williams who has frequently criticized automakers for moving production to Mexico said Tuesday that FCA's recent investments were discussed last year as part of the union's contract negotiations.
The Sterling Heights investment "is great for all of our members and all of the employees at FCA and for the local communities," he said.
In negotiations with the Detroit Three last fall, the UAW won raises for entry-level members hired after 2007, moving most to about $29 per hour from $19.28 over the next eight years.
That agreement, combined with other benefits, erodes the ability of the Detroit Three to make a profit off lower-priced small cars in the U.S.
"When you look at the economics of car manufacturing ...the margins that we were getting from our experience of both the Dart and the Chrysler 200 ...yielded returns that would not, on a competitive basis, match even anything close or remotely close to what we could derive from utilization of those assets in the Jeep or Ram world. So we have made that shift," Marchionne said.
Despite FCA's plans to stop producing the Dart and Chrysler 200, Marchionne continues to say he is looking for a partner willing to make those cars for the automaker.
I think we have made progress. Were not in a position to announce anything," Marchionne said.
07-28-16, 01:33 PM
#3
Fully appropriate for Chrysler junk - the very worst major automaker - to be made at the lowest price possible.
You may recall a few years back Chrysler workers on video getting high and drunk during breaks of the production line.
You may recall a few years back Chrysler workers on video getting high and drunk during breaks of the production line.
Last edited by Chocolate; 07-28-16 at 01:45 PM.
07-28-16, 01:48 PM
#4
Lexus Fanatic
You may recall a few years back Chrysler workers on video getting high and drunk during breaks of the production line.
07-28-16, 01:56 PM
#5
According to the article, the patriot and compass replacement will be made in Mexico now. I'm sure the quality will be (adequate) but my dislike of Chrysler comes from their abhorrent reliability and poor general quality, to say nothing of resale that drops like a rock. None of these are issues with inexpensive US built Toyotas.
07-28-16, 02:21 PM
#6
Lexus Fanatic
My Jeep Grand Cherokees were some of the nicest vehicles I've ever had, I would buy another over a comparable Toyota/Lexus product without hesitation. As for resale, traded the 2014 Jeep in 11 months into a 36 month lease and got my lease payoff. By comparison, I was $8k upside down on my 2013 GS when I traded it in 29 months into the lease, and was a little ahead on my 2010 ES when I traded it in after 30 months.
Chrysler today is not Chrysler of old.
Chrysler today is not Chrysler of old.
07-28-16, 03:12 PM
#7
Lead Lap
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07-28-16, 03:59 PM
#9
Lexus Fanatic
iTrader: (20)
dart and 200 just weren't making it in the market. the dart's a cool car, but the market direction was more to cuv/suvs and competition and margins for the remaining small sporty sedan market are very tough (civic, subaru, focus, etc). the 200 got off to a rough start with bad reviews and problems with the 9 speed auto (now apparently resolved) but it's a really nice car. oh well...
Chocolate - we know of your hatred of chrysler
but you're obviously out of touch regarding Jeep and RAM which have been increasing sales dramatically, are loved, and are not considered bad like chrysler products of old, despite sensationalist claims and subjective 'studies' and 'reports' to drive mag and web subscriptions.
Chocolate - we know of your hatred of chrysler
but you're obviously out of touch regarding Jeep and RAM which have been increasing sales dramatically, are loved, and are not considered bad like chrysler products of old, despite sensationalist claims and subjective 'studies' and 'reports' to drive mag and web subscriptions.
07-28-16, 04:38 PM
#11
Fair enough. Resale value is a primary buying concern for me, though. Not so great on some models, see for yourself on Autotrader.
Toyota is top ranked in this measure of value across major automakers.
Toyota is top ranked in this measure of value across major automakers.
Last edited by Chocolate; 07-28-16 at 04:47 PM.
07-28-16, 05:11 PM
#12
Chocolate, I have always tried to be the number one Chrysler hater.
I read your posts and thought I wrote them except, they were better composed than my spewing vitriole about Chrysler.
Thank you so much for your input.
I am celebrating today's news.
I read your posts and thought I wrote them except, they were better composed than my spewing vitriole about Chrysler.
Thank you so much for your input.
I am celebrating today's news.
07-28-16, 05:16 PM
#13
Lexus Fanatic
Even if the resale were terrible, I'd much rather have a Grand Cherokee than a 4Runner or RX, IMHO its just a much better built, more compelling vehicle. If I have to trade some reliability and resale to have a vehicle that I will enjoy much more day in and day out, happy to do so.
07-28-16, 05:28 PM
#14
Lexus Fanatic
Even if the resale were terrible, I'd much rather have a Grand Cherokee than a 4Runner or RX, IMHO its just a much better built, more compelling vehicle. If I have to trade some reliability and resale to have a vehicle that I will enjoy much more day in and day out, happy to do so.
Certainly no arguments on the design excellence of the Jeep Grand Cherokee, but, to an extent, at least as far as road manners go, the new RX has caught up. Unlike the JGC, though, the new RX's polarizing styling (particularly the spindle grille and floating roofline) are turning some potential customers off.
07-28-16, 05:36 PM
#15
But that doesn't mean that all Toyotas/Lexus models have excellent resale values.
Even if the resale were terrible, I'd much rather have a Grand Cherokee than a 4Runner or RX, IMHO its just a much better built, more compelling vehicle. If I have to trade some reliability and resale to have a vehicle that I will enjoy much more day in and day out, happy to do so.
Even if the resale were terrible, I'd much rather have a Grand Cherokee than a 4Runner or RX, IMHO its just a much better built, more compelling vehicle. If I have to trade some reliability and resale to have a vehicle that I will enjoy much more day in and day out, happy to do so.