Jeep's staying, leaving, coming to Toledo

By Larry P. Vellequette, Crain News Service

DETROIT (Sept. 3, 2015) — Fiat Chrysler Automobiles (FCA) has decided to keep making the Jeep Wrangler in Toledo, Ohio, move production of the Jeep Cherokee to a nearby state and build a new Jeep pickup.

The news comes after 11 months of uncertainty about the fate of Wrangler production in its historic home in the Ohio city.

Details about the Wrangler and Cherokee were shared with Toledo plant management the morning of Sept. 1 in response to inquiries from Automotive News, based on an exclusive interview with FCA chief executive Sergio Marchionne on Aug. 21.

Automotive News has learned independently that Jeep will make a Wrangler-based pickup in Toledo, a move that will soften the blow of a transferred Cherokee — Jeep's best-selling vehicle.

Mr. Marchionne said that the auto maker has “found a solution” to how best to expand production of the Wrangler — in Toledo.

Details of the plan will be announced after FCA's contract talks with the UAW conclude; The contract expires Sept. 14. Separately, Automotive News has confirmed that the plan includes building a long-sought Wrangler-based pickup, likely in 2017 or 2018. That vehicle is under development.

In the interview, Mr. Marchionne provided some details of the emerging plan:

“We found a solution that accommodates a variety of other interests to us because of the way in which we can move some product around,” the CEO said. “It doesn't take a rocket scientist [to know] that the only way I can move around the Wrangler is to move it into the other Toledo plant.”

An FCA spokeswoman said the company would not comment and that the CEO's quotes stood for themselves.

Mr. Marchionne has said since January that he preferred to keep Wrangler production in Toledo.

FCA's Toledo Assembly Complex is composed of two plants: one smaller body-on-frame plant that builds the Wrangler and another nearly new unibody plant that builds the Cherokee. The two lines share some common parts staging, but otherwise operate independently.

The plan would require the unibody plant, locally known as Toledo North, to be converted to body-on-frame assembly. The redesigned Wrangler would launch there.

Loss of the Cherokee is a blow to Toledo, which had sought to keep the vehicle and expand Wrangler production. Through August, the Cherokee is Jeep's top-selling vehicle in the U.S., averaging 17,611 sales per month. However, that wound may be salved if new vehicles to be added prove as popular.

FCA's plan would ensure that Wrangler production would continue while the plant is retooled for the redesigned 2018 Wrangler. The off-roader is one of the auto maker's most popular and profitable vehicles. Production of the redesigned Wrangler and pickup is planned to reach 350,000 per year, according to suppliers briefed on the plan.

The Cherokee would move, likely to Sterling Heights Assembly in Michigan, or possibly Belvidere Assembly in Illinois. Both plants are capable of building the Cherokee with little or no retooling, as the Cherokee shares a platform with the Chrysler 200 built in Sterling Heights and the Dodge Dart built in Belvidere.

Converting Toledo Assembly to all body-on-frame construction would solve another problem for FCA, Mr. Marchionne hinted.

It would allow FCA to retool Warren Assembly in Michigan, where it makes the hot-selling Ram 1500 pickup. Mr. Marchionne said that, like the Wrangler, he can't afford to lose production of the Ram 1500 in order to retool.

“We still have Warren that's not fixed from a manufacturing standpoint,” he said, noting his two constraints are “that I can't take down a day of Wranglers, and I can't take down a day of trucks. So I need to move them around.”

A Wrangler-based pickup has been on Jeep enthusiasts' wish list since the brand showed the Jeep Gladiator concept in 2005. The Gladiator was built on a Ram 1500 frame and shared Wrangler styling.

It is unknown whether the Wrangler-based pickup would be Gladiator-sized or smaller, to compete with the redesigned Chevrolet Colorado and GMC Canyon, as well as a potential Ford Ranger pickup. Either way, the Jeep badge and underpinnings should allow it to sell at a premium above those offerings.

Unknown for now is what will happen to land the city of Toledo assembled for a possible Jeep expansion.

Toledo economic development officials have sought ways to close the cost gap and keep Wrangler in its historic home. For years, Toledo had been quietly buying industrial land adjacent to FCA's sprawling Toledo Assembly Complex in case expansion was needed. To date, more than 100 acres are available nearby. That land could be made available for suppliers, or it could be saved for future expansion of the current Wrangler line.

This report appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.