$4.5 billion over 20 years
$4.5 BILLION OVER 20 YEARS
Keeping Jeep in Toledo a massive investment
July 17, 2016
Over the last 20 years, more than $4.5 billion has been invested to support Jeep production in Toledo, a staggering sum of money even for an industry that’s known to be exceptionally capital intensive.
“That’s a very, very large number when you would compare that to other places. Very few communities have seen investment in the auto industry like Toledo has,” said Paul Toth, president of the Toledo-Lucas County Port Authority.
After decades of workers toiling at what became the industry’s oldest operating plant, and a serious threat in the late 1990s that Toledo could lose Jeep production altogether, the city has been repeatedly rewarded with one of the nation’s most modern and efficient automotive assembly complexes.
That title will be furthered in the coming year as Fiat Chrysler Automobiles moves forward with plans announced last week to invest $700 million to retool part of its Toledo Assembly Complex to make the next generation of the Jeep Wrangler.
The Toledo Assembly Complex began with a $1.2 billion investment, announced in 1997, to develop and build a new plant for the upcoming Jeep Liberty, which debuted in 2001. The plant later got a major expansion as part of a $2.1 billion investment in a new Wrangler, which debuted in 2006. In 2011, the complex got $500 million to support the new Jeep Cherokee, which remains in production today.
The latest investment, of $700 million, solidifies the future of Jeep in Toledo for many.
“That’s a huge capital investment and it really puts the anchor in the ground for us,” said Bruce Baumhower, president of United Auto Workers Local 12, which represents the Toledo Jeep workers. “You don’t spend that kind of money in a place and then walk away from it.”
Those series of investments over two decades came from a number of different corporate owners. The fact that they all saw value in Toledo isn’t lost on Mr. Baumhower.
“There’s been times where our companies were in trouble,” he said. “We always had some comfort in knowing we had valuable assets there for someone else to use.”
Next year, to prepare Toledo Assembly for the next Wrangler, Fiat Chrysler will ship Jeep Cherokee production to a plant in northern Illinois. That will free up space for the company to retool the north section of the assembly complex to accommodate the new Wrangler.
Finding a way to ramp up the new Wrangler while simultaneously building enough current Wranglers to satisfy what remains strong demand — sales topped 20,000 units last month for only the second time ever — was one of the most crucial points Fiat Chrysler had to address in its plans for Toledo.
It isn’t clear exactly when the retooling work will begin, though it’s likely to start sometime in the first half of next year. Industry insiders have said they expect the Toledo plant to continue building the Cherokee into next year’s first quarter.
Fiat Chrysler said only the move would happen in 2017.
A top company official recently said the next generation of the Wrangler would likely make its public debut sometime in 2017. The company has not said when the vehicle will go on sale, but it may not be in dealer lots until 2018.
That the Wrangler would stay in Toledo wasn’t exactly a secret, but last week’s announcement confirmed it.
“We’ve been working on it for a while,” said Chuck Padden, the manager of the Toledo Assembly Complex. “It’s nice to just get it out there and make it official.”
The company hasn’t fully detailed how that $700 million will be spent, though officials say transforming a plant that was building the more car-like Cherokee to make the traditional, body-on-frame Wrangler will take a lot of work, even though that plant is up-to-date.
In fact, by Fiat Chrysler’s own internal metrics, Toledo Jeep is one of the company’s best. The complex this year received a silver-status award in world class manufacturing, making Toledo the second North American assembly plant owned by Fiat Chrysler to achieve the designation and the company’s first U.S. assembly plant to do so.
With Jeep sales growing and $700 million worth of new tooling coming to Toledo soon, there’s no doubt the city’s plant has a long future.
Fiat Chrysler said an announcement regarding the future of the current Wrangler factory at Toledo Assembly will be made later.
The prevailing belief by industry insiders is that Fiat Chrysler will convert that plant to build the yet-to-be-seen Jeep pickup, which the company’s chief executive officer confirmed had been given a green light this year at the North American International Auto Show.
Mr. Toth, at the port authority, said the benefit of these investments doesn’t stop at Fiat Chrysler.
“Think about all the other companies like [automotive suppliers] Kuka and Mobis, and Toledo Molding and Die, and all these other tier-one suppliers,” he said, noting Dana Holding Corp. has committed to open a new Toledo factory. “Part of the reason is the sheer volume of Wrangler and Wrangler pickup trucks.”
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