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Fiat Chrysler Automobiles Ending Car Production in US

Aug 01, 2016

Once bailed out by the U.S., Chrysler will no longer be producing cars in the U.S. by early next year.

Chrysler has changed quite a bit since its bailout, having been acquired by Fiat and renamed Fiat Chrysler Automobiles (FCA). And now, the company’s U.S. plants will focus solely on producing Jeep SUVs and Ram pickup trucks, as it winds down production of the Chrysler 200 and Dodge Dart models. FCA’s remaining cars will be built in Mexico, Canada, or other foreign nations.

Ending passenger car production in the U.S. has been part of CEO Sergio Marchionne’s plan to increase profit margins so that FCA can better compete in the market. Speaking to Wall Street analysts last week, Marchionne confirmed that “all those U.S. plants will be producing either Jeeps or Ram.” Once passenger cars are no longer produced in the U.S., Marchionne believes that there’s a possibility its profit margin will get very close to the 12.1 percent General Motors recently reported as part of its second-quarter earnings.

The future of the Chrysler 200 and Dodge Dart are still up in the air, as FCA is still actively looking for a partner that is willing to produce the two cars. Marchionne confirmed it has been making progress, but the company is currently not in a position to announce anything.

FCA is planning to invest $1.49-billion to retool its Sterling Heights plant in Michigan to make the Ram 1500, which will move from its current plant in Warren when production begins in 2018. Last month, FCA also announced it was investing $1-billion for Jeep plant upgrades, moving production of the Cherokee from Toledo, Ohio to Belvedere, Illinois, so that it can expand Wrangler production in Toledo.
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