Fiat Chrysler Automobiles has announced funding for the last piece of the Jeep production puzzle.
The automaker will spend $1 billion to retool its Toledo and Warren assembly plants in anticipation of three new models, capping off a spending spree that made this round of production plant musical chairs possible.
FCA needs to unload the cash in order to keep the Jeep Wranger pickup, Wagoneer and ultra-lux Grand Wagoneer in the production pipeline.
The funds will see the Warren Truck Plant and Toledo Assembly Complex retooled and modernized to handle the new vehicles. While the 2018 Wrangler is already bound for the Toledo plant with cash in hand, the future pickup can’t be built on the production line vacated by the Belvidere, Illinois-bound Cherokee without a switch to body-on-frame capability.
At Warren, two models in search of a home will finally be able to put down roots. The Wagoneer and Grand Wagoneer are tapped to fill out the upper echelon of Jeep’s lineup. Whether or not the Grand Wagoneer flirts with a $140,000 price ceiling remains to be seen, but at least there’s no longer a scramble to find assembly plants with excess capacity (or money).
“These moves, which have been under discussion with Dennis Williams and the rest of the UAW leadership for some time, expand our capacity in these key segments, enabling us to meet growing demand here in the U.S., but more importantly to increase exports of our mid-size and larger vehicles to international markets,” said FCA CEO Sergio Marchionne in a statement.
The upgrades should be in place by 2020, which gives some idea of when production can commence. Roughly 2,000 jobs should be created from the investments, which will also allow Warren to build heavy-duty Ram pickups.
[Image: Fiat Chrysler Automobiles]
A billion here and a billion there and pretty soon you’re talking about real money.
It took me a few months of reading tjis blog to realize that the car business is one where you spend a billion dollars (give or take, depending), and then (hopefully) make it all back a few thousand dollars at a time (depending on the per unit profit before capital & R&D expenses).
If you can extend the run of a particular model while running the factory at full capacity, as FCA did with the JK/JKU Wrangler, you’ve just built yourself a printing press for money!
As much as I’ve been waiting to see the new Wrangler, I can understand why FCA decided to run the printing press for a couple of extra years. Cha-ching!
What International markets Sergio? Over 85% goes to the US, bulk of the rest Canada. I think the Jeep Pickup, will fill the niche for a RAM mid sizer.
Canada is an international market :oP
Until NAFTA gets revisited, automotive trade with Canada has always been viewed as part of the USA market. That all started with the AutoPact of 1965.
I wonder how well received a Jeep pickup will be?
The next question is engines?
If the interior is as plebeian as the Wrangler then I’ll pass.
I hear you on the interior, but I think there is actually a significant market for a pickup that is kind of spartan.
@kosmo – I tend to disagree. Other than fleet vehicles, I don’t see many “civilians” in “new off the lot” fleet spec trucks. Most trucks I see are mid-spec.
A Jeep pickup will be a hit. American loves Jeeps (for reasons I don’t understand) and America loves pickups – so this is a win/win.
However I am only interested if they offer a diesel engine and some serious sound proofing. Most Jeeps I’ve been in are too loud to make a long distance drives pleasurable.
JMII – the most persistent rumour is diesel i.e. Ecodiesel (VM Motori 3.0) and Pentastar V6. No word of V8 option.
@JMII
Join Australians who are equally as mystified. They have a worse reputation, than any Chinese imports.Now that requires effort to achieve that.
Robert,
That’s the whole point. They are capacity-constrained right now, so there’s no point chasing international markets in a serious way (I know they’ve sent a few down under, but not many).
The plant shuffle should fix that, and it’s the reason why the 200 and Dart had to go. FCA had semi-idle plants building sedans that nobody wanted, and they were near maximum capacity in their truck/Jeep plants.
@heavy handle
Anything Jeep,here is equivalent of the much lamented Ford Edsel in the US. Jeep pickups are not even on the Radar.
FCA has been basically written off, a staggering number of problems,class actions were threatened. Only Fiat products of interest are Case,John Holland ag equipment and IVECO, the latter is doing reasonably well.
Jeep is basically NA only.
Thank you President Trump! The coastal elite party doesn’t give a flying you know what about American workers but thankfully you do. Next up: Tax the Jeep Compass being built in Mexico and significantly reduce H1-B visa’s.
Trump is keeping his word on Making America Great Again!!!
Dude, nothing you hope Thump will do can make you younger or smarter.
And waving those pompoms gonna hurt yer rotators.
Your posts are boring. All of them.
mtmmo,
The plant shuffle was already underway before the US presidential election. I’m not sure that even the most trumpish trumpetist would blow Trump’s trumpet for this. It was going ahead either way.
mtmmo,
OMP’s posts are at least pertinent, and show some wit. Much more interesting than your mindless blather
And as others have noted, this shuffle was in the works for many months prior to the election. Trump had nothing to do with it.
Here’s the funny thing about “boredom”: It, often, has far more to do with the limitations of the person being “bored” than it does with the material being presented.
Yet FCA had the major plant shuffle underway for quite some time.
Wasn’t this outlined in the UAW agreement? Or something reasonably close to this?
It seems to me this was a known item for a while now.
mtmmo,
This decision was made years ago, long before Trump became a “serious” candidate.
Credible rumors about it were reported on this site, and on other popular car blogs.
If you must thank a political leader for this, you can thank Obama.
But this is really about Jeep’s Brand DNA more than anything — and being made in Toledo is part of that. Politics probably wasn’t a factor.
“Politics probably wasn’t a factor.” You clearly have Trump Derangement Syndrome as the WSJ and Bloomberg reported differently.
$1 billion investment and 2,000 new jobs? Clearly a sign that FCA will die in the next six months, amirite?
they’re still vulnerable. They’re utterly unable to make money on pretty much anything other than Jeep and Ram, and way (WAY) behind in electrification. all it will take to end that party is another spike in gas prices.
Here is where I miss BTSR and him to give some anecdotal evidence that Hemi Power in everything regardless of gas price will solve FCA’s problems in the near and short term. I can’t make the case myself, but would love to read his opinion..
Are they behind? The Pacifica Hybrid is looking like the best hybrid yet from the Big 3, by a wide margin. I could see an all-electric Pacifica selling well.
Last I heard they were making money in all geographic regions. GM and Ford aren’t. Obviously, the US pickup market is the cash cow for all 3 groups, but at least FCA’s other divisions are contributing.
They had some minivan production mules out several years ago that would run 400 miles on an 8 gallon tank. Not sure if it was between the Diamler and Cerberus era or why they never went further in developing them.