Chrysler's decision to build the Fiat 500 in Mexico

[rickaren]

Tuesday, August 18, 2009

Choice of Chrysler Mexico plant acceptable

Chrysler's product plan also involves U.S., Canada facilities

Chrysler Group LLC's decision to build the Fiat 500 in Mexico may avoid stiff opposition because its overall product plan will include assembling other new vehicles in the United States and Canada.

The Mexican choice is more palatable to union members because when Chrysler reveals its full product plans this fall, there will be products for plants in all three countries.

General Motors Co. faced a backlash when it considered importing small cars from China, prompting its decision to build small vehicles in Orion Township.

Both automakers declared bankruptcy this summer and required loans from the U.S. and Canadian governments.

Chrysler "has to look at both the U.S. and Canada, based on the loans, as superior partners and commit to products and jobs so they can pay the money back," Ken Lewenza, president of the Canadian Auto Workers, said Monday.

The decision to build the 500 in Mexico "is the worst-kept secret in Detroit," said Michael Robinet, vice president-global vehicle forecasts for CSM Worldwide in Northville.

The site for the 500 needed to be decided quickly because the little car will be the first Fiat sold in America by the new Chrysler formed with Fiat SpA.

Decisions for subsequent products require another two to four weeks, Lewenza said after talking to Chrysler officials Monday.

Plants under consideration for Fiat, or Fiat-engineered products include Jefferson North; Trenton, Belvidere, Ill., Toledo North and Brampton, Ont.

Chrysler spokesman Gualberto Ranieri declined to comment.

A person familiar with product plans confirmed the 500 is earmarked for Toluca, Mexico, which also makes the Chrysler PT Cruiser and Dodge Journey.

Mexico offers lower labor costs and well-developed supply lines, and it is central to take advantage of trade agreements with Brazil, Europe, Asia and the rest of North America. Toluca could also build cheaper versions of small vehicles for sale domestically, Robinet said.

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