Toledo plant to build new Jeep pickup

Fiat Chrysler to invest $1B, create 2,000 jobs in Midwest

1/9/2017

Fiat Chrysler Automobiles’ Toledo Assembly Complex, which has been the home of the Jeep Wrangler line, including these JK models, will build the future Jeep Wrangler pickup by 2020, the company announced.

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A Jeep Wrangler pickup is coming, and it’s coming to Toledo.

Fiat Chrysler Automobiles officially announced Sunday it will build the new truck at its Toledo Assembly Complex by 2020. The company also confirmed it will build what it projects to be a full-size Jeep Wagoneer sport utility vehicle and a range-topping Jeep Grand Wagoneer at a plant in Warren, Mich.

Company officials said the three projects will require a total investment of $1 billion and should create 2,000 new U.S. manufacturing jobs.

“The expansion of our Jeep lineup has been and continues to be the key pillar of our strategy,” FCA Chief Executive Officer Sergio Marchionne said. “Our commitment to internationalize the Jeep brand is unwavering, and with these last moves, we will finally have the capacity to successfully penetrate markets other than the U.S. which have historically been denied product due to capacity constraints.”

RELATED ARTICLE: New Toledo-built Jeep Wrangler to be shown in November

Officials did not say how many of those 2,000 new jobs may come to Toledo or how much of the $1 billion investment will be spent here. A company spokesman declined to comment. Attempts to reach local leaders with the United Auto Workers were unsuccessful.

However, the announcement further cements FCA’s commitment to keeping the full Wrangler line in Toledo. In July, FCA announced it would spend $700 million at the Toledo Assembly Complex to equip the plant for the next-generation Wrangler.

The Blade reported late last year production of that vehicle is expected to begin in November. The company has previously said 700 new jobs would be created in Toledo as a result of the project.

The plant currently has 5,133 employees between the Wrangler line and the Jeep Cherokee line. The new truck will occupy the portion of the plant currently building the Cherokee, which is slated to move to an Illinois plant later this year.

Fiat Chrysler’s timing

The timing of Fiat Chrysler’s announcement on Sunday was seen by analysts as a way to grab headlines ahead of the North American International Auto Show’s major press day today.

But perhaps more importantly, it also serves as a way to stave off commentary from President-elect Donald Trump, who has targeted multiple car companies for making investments outside the country.

“There’s a clear pattern developing between Trump and the automakers, and it’s unprecedented given he’s not even in office yet,” said Karl Brauer, executive analyst and executive publisher for Autotrader and Kelley Blue Book. “The president-elect’s focus on domestic jobs has shifted awareness of this topic, and it’s likely to have a dramatic impact on future U.S. auto production. However, as with all government influence, it will be interesting to see what, if any, unintended consequences surface as a result of Trump’s position.”

The bulk of Jeep production is here in the United States, though the company added the Italian-made Jeep Renegade to its lineup in 2015 and will build the next-generation Jeep Compass in Mexico. The company also builds all its heavy duty Ram trucks in Mexico, though officials noted the investment in Warren would allow that plant to build heavy duty Rams as well.

Jeep brand success

For Jeep, adding a pickup and two full-size SUVs rounds out a brand that’s been crucial to the company’s success. More than 41 percent of all FCA’s U.S. sales last year came from the Jeep brand.

The Toledo-built Wrangler was a major reason for that. Fiat Chrysler sold 191,774 Wranglers in the United States last year, down slightly from 2015’s record levels.

Jeep’s global sales figures for 2016 haven’t yet been released, though in 2015 the company sold a total of 255,283 Wranglers. With a refreshed model that’s significantly more fuel efficient and a more aggressive global sales effort, analysts have said they expect total annual sales of the Wrangler to approach 350,000 units in the near future.

Adding a pickup truck only makes sense, said Dave Sullivan, an analyst with AutoPacific Inc.

“When FCA added the four-door Wrangler, it made the Wrangler a huge success,” he said. “I think this is just going to increase the appeal and give even more utility and usefulness to people. It is going to increase the likability, the sales, and get people excited about the Wrangler again.”

There hasn’t been a Jeep pickup since the Cherokee-based Comanche was discontinued in 1992. However, there has been considerable interest in such a vehicle. A number of aftermarket conversion kits are available to add a truck bed to the current-generation Wrangler, including a $5,500 kit from Mopar, Fiat Chrysler's in-house parts and accessories division.

Mopar has declined to provide sales figures, but a spokesman previously told The Blade it was “extremely popular” and one reason Mopar discontinued the kit was because some critical tooling components necessary to produce it were worn out.

Competition

Meanwhile, adding a pair of full-size Jeeps would allow FCA to compete with the likes of Ford, GM, and Toyota, which all have large truck-based SUVs.

It’s far too early for FCA to announce pricing on the Grand Wagoneer, but it’s possible the vehicle’s range could rival that of the Cadillac Escalade, which starts at about $73,000 and tops out near $100,000.

“There appears to be no limit at the moment for Jeep’s price ceiling and almost anything with the Jeep logo seems to be a success,” Mr. Sullivan said. “Even with the Grand Cherokee, they keep adding more expensive trim levels to it and the buyers aren’t wincing at the price tag. It’s long overdue to add something larger to the Jeep brand.”

Mr. Sullivan noted that the Ram pickup — likely a starting point for the Wagoneer line — already has the best ride in the segment, which could be a major benefit for the Wagoneer.

“If Audi were to make a pickup truck, it would ride how the Ram rides,” he said.

Auto show

None of three vehicles announced Sunday is expected to make an appearance at the North American International Auto Show this week, and FCA isn’t holding a press conference to introduce any new vehicles.

Even so, this should give the company plenty to talk about

Mr. Marchionne said the moves complete FCA’s major revamp of its production footprint as the company sought to key in on consumer shifts to trucks and SUVs.

“These moves, which have been under discussion with Dennis Williams and the rest of the UAW leadership for some time, expand our capacity in these key segments, enabling us to meet growing demand here in the U.S., but more importantly to increase exports of our midsize and larger vehicles to international markets,” he said.

The show’s press preview continues today, with 14 automakers preparing to unveil new models. The show opens to the public on Saturday.

Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134.