Top Fiat Chrysler executive says Jeep not for sale

Sergio Marchionne during a news conference on Fiat Chrysler Automobiles. He is the company's CEO and spoke during the North American International Auto Show, in Detroit, Michigan on January 15, 2018.

DETROIT — The Jeep brand is not for sale. Not to a Chinese suitor. Not to anyone, Fiat Chrysler Automobiles’ chief executive officer said Monday while speaking to reporters at the North American International Auto Show.

“The answer is no,” Sergio Marchionne said. “We’re not going to break up anything. I never said that, I never suggested that we would ever break it up and give it to anybody.”

Speculation grew to a fever pitch last summer when stories came out suggesting Fiat Chrysler might be considering a deal to sell off the Jeep brand to a Chinese automaker, and some financial analysts have more recently speculated something might be in the works.

Mr. Marchionne sought to throw cold water on those reports Monday morning.

“We have no intention of breaking it up and giving anything to the Chinese,” he said.

Mr. Marchionne spent about an hour fielding questions from reporters, giving his views on the industry’s fascination with electrification, the North American Free Trade Agreement, the recently passed U.S. tax cuts, and the company’s decision to invest $1 billion into the company’s assembly plant in Warren, Mich., in order to bring production of the Ram heavy duty pickups back to the United States from Mexico.

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“It is an uneconomical thing for us to produce the heavy duty [trucks] in the United States. It costs us more money than it costs us to produce it in Mexico. But the obligation is deeper than this,” Mr. Marchionne said. “Over 90 percent of that product is sold in the United States. I think it should have never left. It belonged to this country. I think we did the right thing by bringing it back.”

Mr. Marchionne said the decision was helped along by the tax cuts — which project to save Fiat Chrysler $1 billion this year — though the automaker had been looking at the move for some time before the overhaul.

But he said the $2,000 bonuses that Fiat Chrysler will supply to its 60,000 U.S. employees were a direct result of the tax cut. With such a large windfall for the company, Mr. Marchionne characterized paying out the bonus as a sort of “civic duty.”

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In a later session on Monday, Mr. Marchionne briefly addressed the company’s Toledo Assembly Complex, saying he expected Wrangler production there to reach 300,000 units a year — a significant increase from what the plant made last year.

As of now, the automaker is building both the old JK Wrangler and the new JL Wrangler. Mr. Marchionne suggested that should end early in the year’s second quarter.

Once production of the old Wrangler ends, that part of the plant will shut down to be retooled to build a new Wrangler-based pickup truck.

“The only reason why it’s taken this long is because we still have to run the old Wrangler until the other one comes up to speed. I can’t get to the plant in Toledo and retool it until we stop making the old Wrangler, which hopefully will happen by April of this year.”

Mr. Marchionne told reporters he didn’t expect the truck to sell more than 100,000 units a year, though he didn’t give a more precise figure. Analysts have told The Blade they see the Wrangler pickup topping out in the range of 40,000 to 50,000 units per year.

But Mr. Marchionne did suggest the Wrangler truck will not be a natural competitor against the midsize trucks from General Motors or the new Ford Ranger, which made its debut at the Detroit show on Sunday.

“The reality is from a price standpoint, it’s completely out of range,” he said. “The consumer is somebody who appreciates the attributes of a Wrangler and who has a need for additional storage equipment. It’s a unique vehicle.”

The Detroit auto show opens to the public on Saturday and runs through Jan. 27 at Cobo Center. More than 750 vehicles are expected to be at the show.

Contact Tyrel Linkhorn at tlinkhorn@theblade.com, 419-724-6134, or on Twitter @TyrelLinkhorn.