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Published: Tuesday, 6/6/2006

Chrysler halts production of diesel Libertys for U.S.

BY MARY-BETH McLAUGHLIN
BLADE BUSINESS WRITER
Jeep Liberty with diesel engine. Jeep Liberty with diesel engine.
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Toledo-built Jeep Libertys with diesel engines will no longer be made for the U.S. market, DaimlerChrysler AG announced yesterday.

Despite motorists' desires for better mileage by using diesel, the company said stricter emissions standards for 2007 mean that producing the small sport-utility vehicles with that engine is no longer financially worthwhile.

The Toledo Jeep Assembly complex stopped making the vehicles for the North American market late last month, said Chrysler spokesman Dianna Gutierrex. The firm said about 11,000 diesel models have been produced since January, 2005.

The company said the change will not reduce jobs, and diesel versions will continue to be made for overseas markets, where the vehicles are called Cherokees.

"The emissions standards here are stricter versus the European market," Ms. Gutierrex said.

The U.S. Environmental Projection Agency has ordered a sharp reduction in the sulfur content of diesel fuel to cut nitrogen oxides and soot produced by diesel engines.

Chrysler "could not make a credible business case" for the investment to modify the Liberty engine, the spokesman said.

Volkswagen has said it will suspend production of Golf, Jetta, and Beetle diesel models for the U.S. market next year because of the new requirements.

Chrysler plans to proceed, however, on making a clean-burning diesel version of the Jeep Grand Cherokee, which is built in Detroit. That engine will be supplied by Mercedes-Benz and built in Berlin.

"They are two different vehicles, and the standards are not the same for a full-sized sport utility vehicle versus a medium-sized one," Ms. Gutierrez said.

She declined to comment on how many diesel-fueled Grand Cherokees the company hopes to sell.

The tougher emissions standards could affect other diesel vehicles, said Joe Suchecki, a spokesman for the Engine Manufacturers Association in Chicago.

"But I think down the road there're going to be more opportunities as new technology develops to use diesels, so it kind of depends on where each company is and each vehicle is," he said.

The Liberty's 2.8-liter diesel engine gets 22 miles a gallon in the city and 27 miles a gallon on the highway, compared with 17 and 22 for a Limited with a 3.8-liter V6 gasoline engine, according to the company. The diesel is priced at least $1,000 above the Limited.

Some 2006 Jeep Liberty diesels are still available at dealerships.

Jack Streit, assistant manager for the Jeep dealership at Yark Automotive Group, said he was surprised to hear about Chrysler's decision but was uncertain what effect it will have locally.

Hoping to attract customers interested in the extra mileage a diesel-fueled vehicle provides, the dealership ordered 30 to 50 of them, he said.

Then, the price of diesel increased above that for regular gas, resulting in some unhappy customers, he added.

Contact Mary-Beth McLaughlin at

mmclaughlin@theblade.com

or 419-724-6199.



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