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Published: Sunday, 11/20/2011 - Updated: 3 years ago

Chrysler races to meet demand for iconic SUV

Surging worldwide sales stretch Toledo assembly plant's capacity

BY TYREL LINKHORN
BLADE BUSINESS WRITER
Jeep Wranglers are lined up at Chrysler's Toledo North Assembly plant. Jeep Wranglers are lined up at Chrysler's Toledo North Assembly plant.
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As Chrysler Group LLC CEO Sergio Marchionne announced a $500 million investment last week to retool the Toledo Assembly complex's Liberty production line for the next generation Jeep-brand sport utility vehicle, a neighboring plant's line buzzed with activity, as it does 20 hours a day, six days a week.

Even at that fever pitch, the automaker can barely build enough Jeep Wranglers to keep up with demand. It means that while Chrysler is publicly focused on the Liberty plant -- amid much fanfare last week -- capacity concerns to meet expected and planned-for demand worldwide for the Wrangler could result either in another upgrade to Toledo Assembly or a decision to make more of those sport utility vehicles in a Chrysler factory elsewhere.

To deal with demand in the short term, the United Auto Workers union has agreed to work four days next month in the normal shutdown week between Christmas and New Year's Day, the first time UAW Jeep unit Chairman Dan Henneman can recall that happening in his 28 years.

"My plant will do it," he said. "It's just a matter of whether the suppliers can keep us supplied."

U.S. sales of the iconic Wrangler have set monthly records in each of the last five months, and the 14,500 dealer orders placed in the first 10 days of November already have surpassed the number of vehicles built there in three of the last four months. The plant also is nearing what union officials identify as its production capacity.

"To me, this is going to be one of the biggest months we've ever had that we can remember," said Mr. Henneman.

A Chrysler spokesman declined to assign a production capacity number for the plants, but Mr. Henneman said the Wrangler plant's two shifts of workers are producing about 630 vehicles a day. They would struggle to build more, he said.

The success of the vehicle that dates to World War II and of a relatively new four-door version grabbing public attention was bolstered this fall with a new, more fuel-efficient engine.

Through October, production of the Wrangler line -- from two-door soft-tops to top-of-the-line four-door Unlimited models -- was 135,072 units, up about 11 percent from last year. But American buyers have scooped up the vehicle with a fervor not seen before.

July was the best sales month ever for the Wrangler, with 14,335 units sold. In all, Chrysler has sold a total of 101,820 Wrangler and Wrangler Unlimited models through October, a 28 percent increase over last year.

Demand also has increased in other countries. The company has sold 36,164 Wranglers outside the United States through October, up 15 percent from last year. That was driven largely by Canadian sales, up 42 percent from 2010.

Some of this year's sales are attributable to the addition of the more powerful and fuel-efficient 3.6-liter Pentastar V6 engine for the 2012 model year.

The engine, long a star in the Chrysler stable, bumped the Wrangler's horsepower rating to 285 from 202, something dealers say was especially appealing to many buyers.

"We've had customers that specifically put the vehicle on their shopping list as a result of the new motor," said Doug Kearns, general manager at the Yark Automotive Group, which has a Jeep dealership on Central Avenue in Sylvania Township.

But with Chrysler's commitment to push international sales of the Wrangler using Fiat SpA's established dealer network, there's an expectation by many that the current demand won't wane once the glamour of a new power plant wears off.

How that will be addressed by Chrysler is uncertain.

Union officials say that adding a third shift to the plant isn't feasible because the idle time is needed for preventive maintenance.

Adding a Sunday shift has been done on occasion in the past and could be a possibility for building a few more vehicles if demand continues at its current level, they said.

Whether Chrysler would consider building an addition to the body shop or upgrading equipment -- both costly propositions -- is unknown.

"My guess would be they're trying to figure out if this is a longer-term problem or a short-term one," said Bruce Baumhower, UAW Local 12 president. "I'm thinking long term when they tell you they're going to be exporting worldwide. It's a great problem to have."

Jodi Tinson, a Chrysler spokesman, declined to comment on any future considerations to increase capacity at the plant.

Tracy Handler, an analyst with IHS Automotive in suburban Detroit, said her firm does not expect to see the domestic sales growth of the last year continue, although it does expect an uptick in foreign sales. She expects the plant will be able to meet demand in its current configuration and does not expect Chrysler to invest in upgrades for the Toledo plant.

One thing remains certain for now, however: Chrysler's leadership does not intend to build the Wrangler anywhere but Toledo.

"This plant has been at the heart of what we've done," Mr. Marchionne said after Wednesday's announcement. "I've said it publicly that I would never build the Wrangler outside the U.S. and outside of Toledo. These are things that are unthinkable, that we would assemble a Wrangler somewhere else."

Sales growth hasn't been limited to the Wrangler. U.S. Jeep-brand sales are up 25 percent over last year, with every model posting an increase in sales. Overall, U.S. sales for Chrysler over the year's first 10 months have increased 23 percent.

Contact Tyrel Linkhorn at: tlinkhorn@theblade.com or 419-724-6134.



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