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Who gets the precious parts?

by David Zatz on

Chrysler’s ambitious plans to upgrade powertrains across every product line are having repercussions in the assembly plants, as the last, high-volume vehicles are converting to new engines and transmissions. Factories have been unable to keep up with aggressive timetables for both engine and transmission production.

The Pentastar V6 was launched in 2010 in a single plant, the new Trenton South facility, conveniently located next door to the historic Trenton North.  In early 2011, a second mirror-image plant in Mexico started up, and for a time the two competed daily for production. There were numerous problems along the way, including issues with suppliers which were straightened out by sending over Chrysler equipment and people; the long term fix has been to bring production of key components back in-house, with Trenton North re-opened for parts and, soon, another assembly line. Still, the two plants are doing the duty that three were originally intended to do, and as sales climb and the Pentastar engines reach new vehicles (Ram and Cherokee), something has to give. It appears as though minivans will be making the main sacrifice, though the base model Avenger now comes with a four-cylinder only.


Planners are anticipating a crunch on four-cylinder engines as well; some reports claim that there are minor shortages of the existing 2.4 liter engines, given sales hikes in the Patriot-Compass, Journey, and J-cars (200 and Avenger). To keep Sterling Heights and Belvidere running, Dundee’s output has to either be supplemented by another shift, which would likely create too much capacity, or by more V6 engines. Hence the toned-down minivan production: while supplies are not excessive, the plant is on four-hour shifts this week, and overtime has reportedly been cut to practically nothing for the rest of the year. (Until recently, minivans were produced by two dedicated plants.)

The picture gets even more complicated when one considers the TigerShark 2.4, featuring the expensive but efficient MultiAir 2. While the TigerShark 2.0 is essentially just a worked-over version of the original, with the Mercedes-based dual variable valve timing system continuing, the 2.4 is much more of a premium engine — despite the relatively low 184-horsepower figure released for Dart R/T and Dart GT. It will be made on its own line in Trenton North at first, along with the Pentastar V6 — yes, two completely different engine families with different layouts, I-4 and V-6, on the same line. That is an amazing feat in itself.

Once production starts, the Dart GT will finally start seeing the light of day, necessarily in small numbers at first. But that engine will also be used in the Chrysler 200 replacement, and, we suspect, in the Jeep Cherokee. Originally, the Cherokee was to have a single engine, the 3.2 V6, but with supplies of the V6 so small, another engine which we suspect will be in a perpetual shortage condition has been added to the mix.

Eventually, the engine solution is likely to work itself out, if Fiat moves the 1.4 back to Italy, Dundee devotes itself to the new Tiger Sharks, and Trenton North starts pumping out nothin’ but V6 engines. That is, it will work itself out unless Chrysler’s V6 vehicles are all popular at once. There’s a chance that Chrysler will use some of its other space, e.g. in the Mack plants, to add another flex line.

Some may consider that the solution to the V6 shortage is pushing more V8s where possible. The company is already doing that with “free Hemi” Rams, but there are also opportunities in the Grand Cherokee, Durango, and cars — if Chrysler does not mind the shortfall in fleet gas mileage ratings. V8s are a short-term solution, but it is, in some ways, surprising that they are not pushing them more in the car and truck lines. Perhaps it is not surprising: Sergio Marchionne seems to want to fight any widespread belief that Chrysler relies on fuel hogs, and the higher-mileage V6 engines are, therefore, important for the company’s image.

There’s more to the story, particularly with the minivans. Chrysler is using two different eight-speed automatics, an in-house redesign of the state-of-the-art ZF HP8, and a pure ZF-design HP8. Production on these is most likely constrained, and there are plans already announced to boost output with new lines at Kokomo and Tipton. The company went from eight-speeds on just two cars (300 and Charger with V-6) to eight-speeds in those cars, Ram V6 (standard), Ram Hemi (optional), and every Grand Cherokee, with Durango to follow. That’s a huge increase in transmissions needed, but it’s not the end; Charger and 300 both need eight-speeds to go with their V-8s, and so does Challenger, when its new body is ready.

That brings us to the nine-speed automatics. Originally intended for the Dart, production is moving ever so slowly, and they will debut later than expected, on the Jeep Cherokee. While the nine-speeds would most likely boost minivan sales dramatically, at this point we do not believe they will be used on minivans until 2016 (though we could be wrong); before that, they will show up on the Chrysler 200 replacement, and they could even appear on the Compass replacement before hitting the more-profitable minivans.

One issue might be the electronics system, which may need to be upgraded to use the nine-speeds. If that’s true, then upgrading the minivans may be seen as too costly, considering that they are set to be completely redesigned for model-year 2016. A nine-speed minivan would last maybe one or two model years. Instead, the company is likely to manage sales by targeting advertising and incentives, keeping volumes comfortable, not too high, not too low, while Toyota and Honda grab new buyers. By 2016, Chrysler may well be justified in dropping one of the two brands of minivan.

For the last three years, it has seemed as though Chrysler has been actively and continuously managing marketing, advertising, and incentives to achieve specified levels of growth; at this point, though, growth may be dictated less by these levers, and more by how many engines and transmissions the company can make. The management then becomes a matter of figuring out which plants to feed first, complicated by fixed costs, the need to maintain facilities and people for future growth, profit margins, customer loyalty, dealer needs, and image.

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