Bloomberg News

Chrysler CEO Reiterates Jeep Production Staying in U.S.

October 30, 2012

Chrysler CEO Reiterates Jeep SUV Production Will Remain in U.S.

A Chrysler Group LLC employee works on a 2012 Jeep Compass sports utility vehicle on the production line at the company's assembly plant in Belvidere, Illinois. Photographer: Daniel Acker/Bloomberg

Chrysler Group LLC Chief Executive Officer Sergio Marchionne reiterated that Jeep sport-utility vehicle production will stay in the U.S. after presidential candidate Mitt Romney suggested output may move to China.

“Jeep production will not be moved from the United States to China,” Marchionne wrote today in a letter to Auburn Hills, Michigan-based Chrysler’s employees. “Jeep assembly lines will remain in operation in the United States and will constitute the backbone of the brand. It is inaccurate to suggest anything different.”

Romney told a crowd a crowd in Defiance, Ohio, on Oct. 25 that he saw an unidentified story that said Jeep was “thinking of moving all production to China.” The Republican nominee has since aired an ad in Ohio highlighting Chrysler’s desire to make Jeeps in China without mentioning investments and added jobs at U.S. Jeep plants. President Barack Obama is scheduled to air a response ad in the closely contested state today.

Bloomberg News reported Oct. 22 that Chrysler’s majority owner Fiat SpA (F) planned to resume Jeep output in China and may eventually make all of the brand’s models there. The report stated that potential production in China would be in addition to output at plants in Michigan, Illinois and Ohio.

Chrysler hasn’t built Jeeps in China, the world’s largest auto market, since before Turin, Italy-based Fiat took control of the U.S. automaker in 2009 after a U.S.-backed bankruptcy. Production in China would allow Fiat and Chrysler to sell Jeeps that avoid Chinese government tariffs on imported vehicles.

Italy’s Jeep

Marchionne, 60, has said Jeep has the best opportunity among all of Chrysler’s brands to succeed globally. Fiat, which is working on a production plan for Europe to account for the region’s slumping demand, said today that it will build a small Jeep in Italy for export beginning in 2014.

The Jeep, which wasn’t identified by name, is a new model for Europe and the U.S. that isn’t currently in production, according to a Fiat presentation. A small Jeep was among the 66 new and existing vehicles that Marchionne showed at a convention last month in Las Vegas, according to dealers who asked not to be identified because the meeting was private.

Since its bankruptcy in 2009, Chrysler has announced about $4.2 billion in investments for Jeep models and plants that produce them in Detroit; Belvidere, Illinois; and Toledo, Ohio. The three investments will add about 5,700 jobs combined by next year, Marchionne wrote today in his message to employees.

Chrysler reported third-quarter net income of $381 million, an 80 percent increase from a year earlier, in a statement yesterday. Revenue for the quarter gained 18 percent to $15.5 billion.

The U.S. automaker’s results are offsetting Fiat’s widening operating losses in Europe. Fiat said today that earnings before interest, taxes and one-time items, which it calls trading profit, advanced to 951 million euros ($1.23 billion) from 851 million euros a year earlier.

To contact the reporters on this story: Craig Trudell in Southfield, Michigan, at ctrudell1@bloomberg.net.

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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