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FCA CEO: Toledo Move, Two Pay Grades, and Merging With GM

by Bill Cawthon on

Fiat Chrysler CEO Sergio Marchionne talked about a wide variety of topics at the UAW contract opening ceremonies.

In spite of the efforts of the city’s government and the decision to stick with steel for the next-generation Jeep Wrangler, Marchionne isn’t ready to commit to keeping production in Toledo. “…You need to be very careful about… thinking that just because we decided to go steel that it makes the decision to stay in Toledo sort of obvious.”

Jeep-Toledo-Web

Among the challenges is the need to keep production going while expanding capacity; he said that even a 60-day shutdown for retooling would be very costly.

The Toledo plant, ringed by supplier buildings, was designed to produce just 150,000 Wranglers per year. Last year it built 240,000, and future plans call for an annual capacity of 350,000. Through the end of June, Jeep had already sold 113,596 Wranglers in the U.S. and Canada alone.

Marchionne also ruled out another shot at a merger with General Motors, contradicting comments from FCA Chairman John Elkann, who said a link-up with GM is still a possibility. “I was rebuffed once and I won’t go back to get my nose bloodied a second time.”

FCA-UAW-Players-Web

A merger with another company is still on Mr. Marchionne’s to-do list, but the widely-followed pursuit of GM has taken a toll on Marchionne’s image as well as morale at FCA US.

Mr. Marchionne also said he wants to eliminate the two-tier wage structure that has been in place since 2007. He said there is a better than 50% chance of achieving that goal during the current round of talks.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.


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