Chrysler Group’s chief said Thursday that the next generation of the Jeep Wrangler might be built somewhere other than its longtime home of Toledo, an abrupt about-face that caught local auto workers by surprise and set off what may prove to be the city’s second all-out campaign to keep one of its most famous icons here.
Speaking to reporters at the Paris Auto Show, Chrysler Chairman and CEO Sergio Marchionne said that the next Wrangler — due out in 2017 — would likely come with major changes, possibly including an aluminum body.
Those changes, he said, could not work in Toledo, though he predicted employment at the local plant would not be impacted.
“If the solution is aluminum, then I think unfortunately that Toledo is the wrong place, the wrong setup to try and build a Wrangler, because it requires a complete reconfiguring of the assets that would be cost-prohibitive,” Mr. Marchionne told trade publication Automotive News. “It would be so outrageously expensive that it would be impossible to try and work out of that facility.”
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Local officials with the United Auto Workers were blindsided by the comments, quickly arguing that the Wrangler belongs in its historical home of Toledo.
“I don’t care if they make it out of aluminium, if they make it out of steel. Whatever they want to make it out of, it’s got to be made in Toledo, Ohio,” UAW Local 12 President Bruce Baumhower said. “We’ve earned that. We’re going to demand that. We expect nothing less than that.”
UAW Jeep unit chairman Mark Epley said his phone was “going off all day” with calls from members angry about Mr. Marchionne’s comments.
Though Jeep’s owners have changed several times, workers have been building the vehicles here for more than 70 years. The Wrangler and its predecessors have been a cornerstone of that. Except for a short period in the late 1980s and early 1990s, the CJ-series and Wrangler have always been built in Toledo.
The first Jeeps were built in Toledo in 1941, and about 650,000 of the famous military vehicles were built during World War II. The first civilian models were built in 1945.
As recently as January at the North American International Auto Show in Detroit, Mr. Marchionne said that he had no intention of building the Wrangler anywhere but Toledo, a pledge he has repeated multiple times in recent years. He even hinted that the company was looking into the possibility of investing in its plant here to get more capacity, though no specific plans were disclosed.
Mr. Marchionne said, in response to a question about the Wrangler during a news conference at the show, “One of the commitments we’ve made is never to produce a Wrangler outside of Toledo. ... As long as I’m the CEO, they will not be built anywhere else.”
Workers at the plant built a record 223,000 Wranglers last year. They built 120,000 in the first half of this year.
What caused the change of heart for Mr. Marchionne wasn’t clear, though the issue seems to have shifted from one of capacity to one of capital.
A Chrysler spokesman declined to comment or elaborate on Mr. Marchionne’s remarks in Paris.
It’s no secret that Chrysler feels it needs to take weight out of the Wrangler. More stringent government fuel economy standards are coming, and the old-school, body-on-frame Wrangler burns too much gas.
Going with an aluminum body — as Ford has with the new F-150 pickup — could help. So could going to a unibody platform. Though Mr. Marchionne didn’t say those were done-deal decisions, he strongly hinted that the company was leaning that way.
Cost analysis
Analysts say the costs Chrysler would face in Toledo are about more than the type of metal used.
“The expense is not just related to the aluminum. It’s related to converting the Wrangler from a body-on-frame structure to a unibody. You can’t use the current tooling; it has to be assembled in an entirely different way,” said Michelle Krebs, an analyst with AutoTrader.
The process for building a body-on-frame vehicle is different than a unibody vehicle. It’s the reason there are essentially two separate plants at the Toledo Assembly Complex — one for the Wrangler and one for the Jeep Cherokee, which debuted last year.
And though Chrysler has some capacity constraints, it does have capacity available at existing unibody plants, including a plant in Belvidere, Ill., and one in Sterling Heights, Mich.
Dave Sullivan, an analyst with AutoPacific, was somewhat surprised Chrysler would consider moving Wrangler production from Toledo, given its history here. However, he said the strength of Mr. Marchionne’s comments seems to lead down one of two paths.
“Either the Wrangler’s not going to be aluminum, or Wrangler’s not going to be in Toledo,” he said.
That’s not to say Toledo will lose jobs. Even if the Wrangler moves, Mr. Marchionne said in Paris, he would expect no change in employment at the Toledo Assembly Complex.
“One of the things that we are dealing with now is what else do we do with Toledo that fulfills our commitment to the city and to Ohio. I don’t have a doubt that there will be zero impact on head count and employment levels and anything else,” Mr. Marchionne said.
There are a number of upcoming Chrysler Group vehicles that could potentially be built in Toledo. Mr. Sullivan noted that the Detroit-based automakers have been moving production closer to their headquarters, not farther away. And with Toledo’s proximity to Detroit, auto suppliers, railroads, and highways, it makes sense for the company to keep the plant running here.
“There’s too many good things,” Mr. Sullivan said. “The location is prime. I don’t think the plant is going to disappear. I think a lot of it will come down to UAW negotiations too.”
Union concern
But for Mr. Baumhower, the promise of something else isn’t good enough.
“We’re not going to sit here and cross our fingers and hope we get a product that will keep our members working. We’re going to demand that we keep the product that we’ve got,” he said. “We invented the car here in Toledo, Ohio; it belongs in Toledo, Ohio.”
Whether the problem is financing or capacity, Mr. Baumhower said the community can find a solution.
Jeremy Acevedo, an analyst at Edmunds.com, said it’s unlikely a final decision has been made, but Mr. Marchionne’s comments seem fairly resolute. However, he does question the message.
“It seems like he’s ruffling a lot of feathers, and I’m not sure if that’s the right move on this one,” Mr. Acevedo said.
Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134 or on Twitter @BladeAutoWriter.
First Published October 3, 2014, 4:00 a.m.