Expanded Cruiser output bypasses city for Mexico

4/24/2001

Toledo Jeep workers hoped to be the answer for the needed extra production of the popular PT Cruisers, but DaimlerChrysler AG announced yesterday that added output of the retro-styled vehicles will be done in Mexico.

Not only would the PT Cruiser have been an added vehicle for the Toledo Jeep Assembly Plant, its production would have offset some of the expected hundreds of job losses when the company ends Jeep Cherokee manufacturing this summer and scales back on Jeep Wrangler output.

“We made our pitch for it, and we would have liked to build it,” said Bruce Baumhower, president of United Auto Workers Local 12, which represents hourly workers at the three-factory plant.

“They'd [DaimlerChrysler] better find something to bring in.”

Daimler raised the annual production target for its PT Cruiser yesterday by 35 percent, to 310,000 vehicles, to meet demand.

The 80,000 additional vehicles will be built at the automaker's Toluca, Mexico, factory, which makes all the PT Cruisers sold in North America.

A $300 million expansion in Toluca, to make 260,000 PT Cruisers a year, will be completed by late 2002, the company said. The car is also built in Graz, Austria.

DaimlerChrysler has sold more than 175,000 PT Cruisers, which draw some styling from London cabs of the 1930s, since sales began a year ago.

That exceeds the initial goal of 70,000 a year.

“It's a big hit, and they obviously believe that it's not a fad because they won't be able to get anything from this for more than a year,” said David Healy, an analyst for Burnham Securities, Inc., in Tucson.

The news was released just days before Daimler is to formally dedicate its Toledo North Assembly factory, a $750 million facility where it has begun to make the Jeep Liberty that will replace the Cherokee.

That ceremony is scheduled for Monday, and some auto dealers nationally are expecting their first Liberty deliveries within a few weeks.

Mr. Baumhower said he considers the opening of the factory the first phase of the automaker's efforts to rejuvenate Jeep in its hometown. The former Chrysler Corp. promised in 1997 that it would spend $1.2 billion on new and existing Jeep operations and would keep 4,900 jobs secure.

However, up to 1,600 permanent Toledo Jeep jobs are expected to be lost after the Cherokee's end in June and the Wrangler's production change in August. Early retirement packages will be discussed in June, Mr. Baumhower said.

Nine hundred Toledo North jobs could be added if demand requires a third production shift, although that would not be likely until January at the earliest, Mr. Baumhower said.

The union expects another Jeep or other sport-utility vehicle to be added because workers have met every challenge, including the smooth launch of sellable Libertys in recent weeks, he said.

“We've earned full employment in Toledo,” Mr. Baumhower said. “We're ready for another one.”

An executive of the world's fifth-largest automaker verified publicly for the first time yesterday that Toledo Jeep was considered for PT Cruiser production. Also considered were plants in Belvidere, Ill., where Dodge Neons are made, and Windsor, Ont., said Gary Henson, executive vice president of manufacturing.

“It was studied as much as any product I've ever seen,” he told reporters after a plant tour of the new Toledo North plant.

Daimler said the expansion plan of the Toluca factory is in addition to an investment of $780 million that it plans to carry out through 2002 in Mexico.

“The company's trust in Mexico's labor force, as well as in the quality that its employees provide this vehicle, are some of the reasons for which Chrysler initiated production in Toluca,” said Miles Bryant, president of DaimlerChrysler Mexico SA.

The automaker, which said three months ago it would cut 2,600 jobs in Mexico, may rehire some of those workers. The company plans to add 1,100 new jobs in Toluca.

Meanwhile, General Motors Corp. said yesterday it has lured away the designer of the PT Cruiser to head its Chevrolet design studio.

Bryan Nesbitt, 32, resigned last week as design manager at the Chrysler unit, where during seven years there he was the leading exterior designer of the 2001 PT Cruiser.