Toledo-made Jeep vehicles assigned key role for Chrysler turnaround

A Jeep Patriot and a Fiat 500 were among vehicles displayed for yesterday's announcements. The firm hinted that a new Fiat could be made in Toledo.

Carlos Osorio / AP

AUBURN HILLS, Mich. —Chrysler Group LLC officials yesterday revealed broad changes coming to Toledo-made sport utility vehicles and hinted at plans to “expand the derivatives” of its iconic Jeep Wrangler.

During a seven-hour presentation at Chrysler's headquarters 30 miles north of Detroit for more than 400 journalists, analysts, dealers, and public officials, company executives laid out how they expect to move from bankruptcy to profitability in just five years.

Details were scarce about how the Toledo area's three Chrysler manufacturing plants fit into the automaker's future under its new management team from strategic partner Fiat SpA. However, executives indicated that the firm would dramatically alter some of its Toledo-made offerings and expand efforts to export vehicles like the Wrangler.

Overall, the plan called for boosting overall Jeep sales by 60 percent, which is likely to mean sharply increased production in Toledo of Wranglers, which in turn possibly could mean hundreds more jobs for factories at the Toledo Jeep Assembly complex. The complex makes the Wrangler, Jeep Liberty, and Dodge Nitro.

Further, there are plans to “refresh” the three vehicles made in northwest Ohio, and a hint that a Fiat vehicle could be made here within four years.

Bruce Baumhower, president of United Auto Workers Local 12, which represents Toledo Jeep workers, told The Blade that the strategy of Chrysler's Fiat owners has union officials and workers excited.

“I think they get it,” he said. “Whether they were talking about dealers or marketing or products or technology, Fiat really seems to get it all.”

Also expected to be helped by the company plan is Global Engine Manufacturing in Dundee, which makes small-car engines. Company executives at the presentation talked about expanding the production there.

Less clear was whether the new plan will have much effect on Chrysler's Toledo Machining Plant in Perrysburg Township, which makes steering columns and torque converters.

Joe Veltri, Chrysler vice president of product planning, outlined many product upgrades and redesigns across the automaker's entire vehicle lineup. Seventy-five percent of Chrysler, Dodge, and Jeep models would be renewed or refreshed in 2010, and all vehicles would change by 2012.

Wrangler, he said, is to receive “a dramatic new interior” in 2010 that “is sure to please Jeep owners everywhere.” The vehicle would get a new powertrain in 2011 to improve power and fuel economy.

Every Jeep model, he said, will have special commemorative editions in 2011 to recognize the brand's 70th anniversary.

Executives revealed that the Jeep Liberty will be “refreshed” in 2010 and will be moved to a Fiat-based platform in 2013, raising the question of whether it would be built in Toledo along with a Fiat vehicle.

The company said the Nitro SUV will stay in production through at least 2011, and a “refresh” of the troubled model for 2012 is still “under consideration.” Most analysts had expected it to be discontinued.

Chrysler underwent a two-month Chapter 11 bankruptcy filing this year, shutting down in April and not reopening until its connection with Fiat was completed in June. The company received $12 billion in loans from the federal government to get through its reorganization, and executives said yesterday that the plan calls for those loans to be repaid by 2014.

Sergio Marchionne, who is chief executive officer of both Chrysler and its Italian alliance partner, Fiat SpA, said the automaker would not return to ask the government for further assistance.

A Jeep Patriot and a Fiat 500 were among vehicles displayed for yesterday's announcements. The firm hinted that a new Fiat could be made in Toledo.

After the presentation, he said the five-month quiet period between the June 10 emergence from bankruptcy and yesterday's announcements hurt Chrysler.

“We were too quiet for too long,” he told reporters. Large marketing efforts for its brands are being rolled out, he said.

“This is a very sensitive time right now. We're learning how to manage our survival,” he said.

But during the meeting, he said the company would be hiring engineers and, eventually, line workers.

“We need to make a decision sooner or later about what we do with the D-segment car and where we make it,” Mr. Marchionne said. “But these are all American jobs, and they're going to be kept here.”

D-segment cars include the midsize Dodge Avenger and Chrysler Sebring.

Michael Manley, president and chief executive officer for the Jeep brand, said that the Toledo-born and made Wrangler will remain “the anchor” of the brand and that Wrangler features will be expanded from the current offerings and trim levels.

For core Jeep enthusiasts, Mr. Manley said, the vehicle will retain its traditional underpinnings of solid axles and body-on-frame, truck-type construction.

But Wrangler offerings will be expanded and pushed globally to take advantage of the brand's worldwide recognition, Mr. Manley said.

“Wrangler will remain as the ultimate expression of the brand,” he said.

Although specific Wrangler offshoots weren't revealed, Jeep enthusiasts have long requested a Wrangler-based pickup truck.

Mr. Manley said that the automaker will take advantage of Fiat's worldwide distribution network to aggressively push Jeep-brand global sales. He predicted global sales for the brand to grow from 497,000 vehicles last year to more than 800,000 by 2014 and said the dramatic increase would be led by the Wrangler and the Detroit-built Jeep Grand Cherokee.

Sergio Marchionne, CEOof Fiat and Chrysler, said Toledoans should be proud of the company.

The Toledo UAW's Mr. Baumhower, who was not at the presentation, said it is conceivable that the Toledo Jeep complex could make half of the 800,000 vehicles to be sold in five years, which could mean added shifts and employees, possibly back to more than 4,000 from fewer than 3,000 now.

Such added production also would spur hiring at area plants that supply Toledo Jeep, possibly meaning an additional 1,000 jobs, he said.

Among other revelations at the Chrysler meeting, executives said that fuel-efficient “stop-start” technology will make its debut on a diesel-powered Wrangler to be sold in the United States in late 2010.

Jeep enthusiasts have long asked for a diesel-powered version of the Wrangler because diesel engines, in addition to providing greater increases in fuel economy, offer increased torque that aids off-road applications.

Paolo Ferrero, senior vice president for Chrysler Powertrain, said the automaker will aggressively downsize many of its engine offerings while increasing power and fuel economy through the use of turbocharging and Fiat's “multiair” technology.

Ralph Gilles, Dodge brand president, used the Nitro to show how the automaker will offer greater features on existing models to weather the time until new products can be introduced starting in 2012.

By the end of the year, the company plans to upgrade the interior and exterior appearance of the Nitro, making it less of an off-road twin of the Jeep Liberty and more of a youthful, urbanized road vehicle.

Previous Chrysler officials had indicated that the Nitro, whose sales are down more than 54 percent this year, might not survive past a planned 2012 redesign. The Nitro is manufactured on the same line as the Jeep Liberty.

Jeep's Mr. Manley indicated that the Jeep brand would alter its range of offerings to include more carlike vehicles, even as it maintains “trail-rated” versions of those new vehicles. Company materials indicated that the Liberty would be redesigned for 2013 based on future vehicle architecture from Fiat.

Asked by Toledo Mayor Carty Finkbeiner what he and others could do to help Chrysler pull off its plan, Mr. Marchionne said people who care about the company should be proud.

“I think you just need to be proud of this American car company,” Mr. Marchionne said, calling the Wrangler his “favorite car.”

After the presentation, Mr. Finkbeiner said he was encouraged by what he heard, and although plans for Toledo weren't laid out specifically, he said he is confident Chrysler has big plans for its local plants.

Mr. Finkbeiner ate lunch seated next to Chrysler board Chairman C. Robert Kidder, who told the mayor that he drives by the Toledo Jeep plants regularly as he commutes from Columbus.

“It's always fun to be part of history,” Mr. Finkbeiner said, adding that he and Mayor-elect Mike Bell would be inviting Mr. Manley to come to Toledo and tour the automaker's facilities here.

Lucas County Commissioner Pete Gerken, who was at the presentation in the Detroit suburb, said he thought Chrysler made “a huge commitment” to Jeep. He retired from Chrysler in 2006 after building Jeeps in Toledo for 30 years.

“The road for Chrysler's return and Fiat's success in North America runs right through Toledo,” Mr. Gerken said.

Contact Larry Vellequette at:lvellequette@theblade.comor 419-724-6091.