Faced with a huge inventory of vehicles that still aren’t quite ready to be shipped to dealers, Chrysler Group LLC has temporarily shut down the Toledo Assembly Complex’s new afternoon shift on the Jeep Cherokee line.
About 500 employees were laid off, though Chrysler officials said they should be back on the job in roughly two weeks.
Chrysler began producing the new Cherokee on one shift on June 24. The company added the second shift Aug. 19.
Through the end of August, the plant had built 9,430 Cherokees.
With workers able to finish about 400 vehicles per shift, Chrysler could have added several thousand to that total over the last three weeks.
But no vehicles have been sent to dealerships yet.
“We have been producing vehicles since the end of June and have now built the critical number of vehicles we need to stock dealerships once containment is released,” the company told The Blade in a statement.
“We will temporarily idle the second shift so as not to put additional strain on our logistics partners to get these vehicles into the hands of customers as quickly and efficiently as possible upon release."
The plant’s first shift will continue operating normally.
Chrysler officials previously acknowledged they were having calibration issues with the Cherokee’s new nine-speed transmission that would require early build vehicles to be reprogrammed, delaying shipment of the vehicles by about a month.
Sources said the company has put those those issues behind it, and the transmission is operating as designed.
However, Chrysler is still taking the unusual step of again test driving every vehicle that had already been built. Union officials said the length of the drive varies from vehicle to vehicle, but that drivers are testing everything.
In spite of that, Bruce Baumhower, the president of United Auto Workers Local 12, said there is not a problem with the Cherokee.
Instead, he said Chrysler is being extra-cautious on a complex launch. Not only does the Cherokee have a new transmission, it also has a new engine and new four-wheel drive systems.
“These will be perfect when they hit the showrooms,” Mr. Baumhower said. “This is a double-check. They've already been OK’d; this is to do a final drive-through.”
A company spokesman said Chrysler is doing “extended quality validation” testing but declined to elaborate.
The company said some second-shift workers have been kept on to help with the testing.
Chrysler spokesman Jodi Tinson said the company still expects to have vehicles in dealerships by the end of this month.
However, one local dealer said he wouldn't be surprised if his lot doesn't get the Cherokee until early October.
Michael Barchick, vice president and general manager at Charlie's Dodge Chrysler Jeep in Maumee, said he’s eager to get the Cherokee to sell, but also said he’d rather Chrysler take its time to make sure the vehicle is ready.
“They’re going to get it right,” he said.
“They can’t afford not to. They're doing their due diligence. If they have to push the launch date back, so be it.”
Mr. Barchick is expecting to sell 10 to 20 Cherokees a month.
With the Liberty, the vehicle that the Cherokee is replacing in Jeep’s lineup, Mr. Barchick averaged five to 10 sales a month.
Still, the delays have frustrated some Cherokee buyers who already put in their orders and are wondering what’s keeping their vehicles from reaching dealerships.
One buyer in Telluride, Colo., said he ordered a Cherokee Trailhawk on Aug. 9, the first day dealers could submit orders, but hadn't heard anything since.
“Jeep has been silent on what they are doing,” he wrote in an email to The Blade.
Both union and company officials emphasized the layoffs were temporary and workers will be back on the job soon.
Mr. Baumhower is expecting big things from the Cherokee.
"We think this vehicle will take the market by storm, and I predict by next year we might have to look at a third shift and add another 800 to 900 people,” he said.
Chrysler has added more than 1,800 jobs at the Toledo Assembly Complex since Jan. 1 in order to add the second shift on Cherokee and support Wrangler production.
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