Jeep plant may add several hundred jobs

9/21/2018

Bruce Baumhower, president of UAW Local 12, said the nearly 1,000 temporary employees at the Wrangler plant would likely get first crack at the several hundred jobs that the added work would create.

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Customer appetite for the hot-selling Jeep Wrangler has Fiat Chrysler Automobiles and the United Auto Workers considering adding a third production shift at the automaker’s Toledo Assembly Complex.

If the decision is a go, the nearly 1,000 temporary employees at the Wrangler plant would likely get first crack at the several hundred jobs that the added work would create, said Bruce Baumhower, president of UAW Local 12, which represents hourly workers at the complex.

Since the new-generation Wrangler launched in April, the assembly complex has been running two, 10-hour shifts six or seven days per week, Mr. Baumhower said. The 5,000 hourly and 1,000 salaried workers at Toledo Jeep make all Wranglers sold worldwide.

Sales set an all-time record for the Wrangler model in April at 29,776 units. And those sales have stayed above 20,000 in each of the subsequent months, establishing monthly records in May and August as well.

“The new Wrangler has been performing extremely well,” said Michelle Krebs, executive analyst with the car-shopping site Autotrader. “It’s almost a brand within a brand.”

UAW Local 12 president Bruce Baumhower

The vehicle is in extremely short supply as Fiat Chrysler ramps up production in Toledo and looks for ways to eke more volume out of the plant, including possibly adding a third shift.

A Fiat Chrysler spokesman declined to comment on production in Toledo.

Auto dealers have only a 41-day supply of the Wrangler when 60 days is considered ideal, Ms. Krebs said, meaning customers may find just limited supplies of the sport-utility vehicle on dealer lots.

She said the latest generation Wrangler was anxiously awaited by enthusiasts around the world, releasing pent-up demand to some degree. But it also is appealing to motorists interested in a solid city vehicle with true off-road capabilities.

“It’s a strong new model really without a true competitor,” Ms. Krebs said.

Any vehicle launch is subject to some manufacturing glitches and the Wrangler is no exception. In the past two weeks, production fell below 900 units per day on a couple of occasions as the plant dealt with parts and manufacturing concerns. 

Overall, however, the launch is going smoothly, said Bernard Swiecki, assistant director of the industry, labor, and economics group at the Center for Automotive Research in Ann Arbor.

The rate of production that Mr. Baumhower said the plant has achieved, about 220,000 units annually, is “realistic and desirable” about five months into launch, Mr. Swiecki said.

That contrasts with the choppy launch that Fiat Chrysler experienced with its Ram 1500 full-size pickup at the automaker’s retooled assembly plant in Sterling Heights, Mich., he said. Even the late Sergio Marchionne, Fiat Chrysler’s CEO, conceded in April that the January launch had been fraught with quality and supply problems.

Mr. Baumhower said the UAW is studying with the company whether a third production shift at the Wrangler plant would help to get production closer to the 320,000-unit annual capacity of the plant. The Wranger is an important vehicle in the Fiat Chrysler lineup, selling at an average transaction price of $31,489, Krebs said.

Today, workers at the plant build Wranglers under a unique schedule. Each month hourly workers can select whether they want to work 40 hours, 50 hours, or 60 hours in a given week. The 1,000-plus temporary workers fill the holes to have enough workers on a shift.

Under a more traditional schedule at an auto plant seeking to boost production, one group of workers works 10 hours Monday through Thursday, an afternoon crew works 10 hours Wednesday through Saturday, and a third group works day-shift on Friday and Saturday and nights Monday and Tuesday. The so-called 3-2-120 schedule allows the plant to operate 120 hours a week at straight-time pay, with four hours a day for maintenance. Some workers find this disruptive to family life.

The Wrangler plant has been operating at least six days a week since the launch of the next-generation vehicle and often on Sunday, Mr. Baumhower said.

Moving to a traditional three-shift, eight-hour day would allow the plant to milk at least two more hours of production per day, even with maintenance, or an additional 110 vehicles, he said.

The several hundred jobs that a third shift would create at the Wrangler plant are in addition to the 1,300 UAW members who will be recalled in the coming months to build a Jeep mid-sized pickup truck at the second assembly plant in the Toledo Assembly Complex.

That second plant won’t reopen for the Jeep pickup production until sometime during the first half of next year. Yet, Mr. Baumhower is already looking for ways to convince Fiat Chrysler to expand it.

That’s because media reports last week said the plant was in the running to produce a sister pickup truck for the Ram brand beginning in 2020 - speculation that Fiat Chrysler squelched. In fact,Mr. Marchionne said at a June product reveal that the planned mid-sized Ram pickup would likely be built outside the United States, most likely at the company’s assembly plant in Saltillo, Mexico.

Mr. Baumhower, however, intends to make a pitch for the work, which would create another 1,000-plus jobs for the 100,000 vehicles annually Fiat Chrysler hopes to sell. The catch is that a second body shop would have to be built across Stickney Avenue from the current assembly plant, he said.

As the Fiat Chrysler manufacturing plan now stands, the Jeep pickup will use all available space in the body-shop portion of the plant, effectively limiting capacity to about 100,000 units annually or what analysts expect the company to sell. That same plant was able to build 244,000 vehicles in 2017, the last year that the previous-generation Wrangler was made there. But the Jeep mid-sized pickup has a different manufacturing configuration that requires the truck beds and cabs to be built separately, cutting by more than half the production capacity that the plant had obtained. 

Mr. Baumhower’s long-shot solution is to build a second body shop on 100 acres of city-owned vacant land and conveyor or truck the bodies across Stickney for final assembly.

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The parcel was compiled by the city over the years and cleared for an automotive purpose, either for Fiat Chrysler directly or for its suppliers, said Paul Toth, president and CEO of the Toledo-Lucas County Port Authority.

The port authority, using its ability to raise money for investment through the bond markets, has helped to bring other automotive jobs to Toledo by building, then leasing, factories at the Toledo Assembly Complex as well as the Overland Industrial Park, on the site of the original Jeep Parkway plant.

Mr. Swiecki, at the Center for Automotive Research, said it would make sense for Fiat Chrysler to build the versions of the Ram and Jeep pickups side-by-side in Toledo since they will have a common underpinning and the company can save money by sharing components and the same manufacturing tools in final assembly.

But the carmaker will have to weigh the additional cost of having to build a second body shop in Toledo and shipping truck bodies across a street versus assembling the vehicle with entirely new manufacturing equipment in a generally lower-cost setting in Mexico.

“Is it cheaper for Fiat Chrysler to just tool up from scratch,” Mr. Swiecki said.

Contact David Barkholz at dbarkholz@theblade.com or 419-724-6134 or on Twitter @barkholzatAN.