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September 21, 2008

Jeep/Nitro complex’s future intriguing

Recently, Chrysler LLC changed the Jeeps outside the automakers’ multibillion dollar assembly complex in North Toledo. The symbolism couldn’t have been clearer.

Gone are the Wrangler and Liberty emblazoned with red, white, and blue accents that evoked the ultra-patriotism that followed in the months after Sept. 11, 2001. In their place parked before the giant faux-stone ‘Jeep’ sign near the intersection of I-75 and I-280 are new — and much less dramatic — production models.

The switch is just one outward sign of changes that have happened inside the facility in the last nine months.

Still, prospects for Toledo’s largest manufacturer are intriguing. The Toledo Jeep Assembly complex makes Jeep Wranglers and Libertys and Dodge Nitros, with approximately 3,400 workers.

No announcements have been made, but the factories there could be retooled to make non-Jeep vehicles — perhaps even featuring electric drive components — or accommodate a new Jeep pickup truck on the frame line where the Wrangler and Wrangler Unlimited are built. Chrysler showed a small, off-road capable Jeep pickup concept, called the Gladiator, that was well received at the Detroit International Auto Show in 2005.

Either route would bolster the range and excitement of vehicles made at the complex, and ultimately could mean more jobs.

Perhaps most interesting is the possibility that Chrysler would either move a sedan or crossover vehicle with high miles per gallons to Toledo, or build a brand new vehicle here.One program of interest is Project D, which is being studied by a group of top engineers and designers at the company’s Auburn Hills headquarters. Chrysler’s vehicles have the poorest average mileage among the Detroit Three automakers, and a top executive said this month that will change.

Jim Press, Chrysler’s vice-chairman and president, was cagey with automotive writers in Detroit about the Project D products and timetable. The program was to investigate a mid-sized, or ‘D-segment’ vehicle, that industry analysts believe would replace the slow-selling Chrysler Sebring and Dodge Avenger. The company plans to introduce seven new vehicles for the 2010 model year, but has yet to identify what those models would be.

‘It’s completely innovative new concepts, off-the-chart, out-of-the-box thinking,’ he said.

But Chrysler insiders said Project D is also to determine whether a full-range of vehicles — a sedan, a crossover, a sport utility vehicle, even a small pickup — can be built off the same platform. If so, an assembly plant would be positioned to ramp up production for whichever vehicles are selling better.

The two big plants at Toledo Jeep, built for $3 billion in the last 10 years, would be capable of handling such a project, experts have said, as would other Chrysler assembly plants.

Frank Ewasyshyn, Chrysler’s executive vice president for manufacturing said this summer that the company’s Toledo plants have few limitations on what products they could build with relatively minor changes.

‘They can run body-on-frame, they can run unibody, they can run front-wheel drive, they can run rear-wheel drive,’ he said. ‘It’s a pretty flexible place.’

Also enticing to company executives: workers have helped Toledo Jeep this year receive a coveted award for the most-productive assembly plant in North America and are actively negotiating to implement a 4-day, 10-hour-a-day workweek that will save money.

The Toledo Jeep products, like most SUVs in the industry, have had poor sales and that has resulted in shutdown weeks — two months this summer for Nitro and Liberty and other weeks off from all the factories.

Chrysler executives have indicated that either the Nitro or the Liberty will be killed in the next two years, which could free production space for another vehicle if sales of the survivor do not increase.

Through August, sales of the Liberty are down 20 percent for the year at 49,330 units. Wrangler sales have dropped 30 percent to 59,005, and Nitro sales are down 44 percent at 27,540.

Separately, at least two automotive suppliers with close ties to Chrysler’s operations in Toledo are pursuing expansion plans, according to local officials. One of those firms is looking to purchase or build one or two new parts plants in the area.

Decoma Systems, which assembles front ends for the Toledo-built vehicles at a 173,000-square-foot plant in North Cross Industrial Park, filed plans this month to expand
by over 50 percent to ‘accommodate increased production.’

That was surprising, given Toledo Jeep product sales and no known news that would boost manufacturing.

Haig Stoddard, an auto analyst with Global Insight in suburban Detroit, said he could only speculate on what Chrysler’s plans might be for the Toledo plant in the near future, but said the supplier moves could be a welcome sign.

‘The only reason that they would be doing that is if they were going to be adding a product into there,’ he said.

MaryBeth Halprin, a Chrysler spokesman, said Chrysler ‘does not have any announced plans to increase production at those plants,’ and cautioned that the supplier announcements may be for other automakers.

Lloyd Mahaffey, director of Ohio’s region of the UAW, predicted that Chrysler will keep looking favorably at Toledo because of its ‘outstanding work force.’ He said Chrysler’s decision in 1998 to build a new plant in Toledo was proof.

‘The work force was really what drove that decision, and I think it’ll drive future decisions,’ he said, adding that increasing the fuel economy of Toledo-made vehicles is the way to get Jeep workers back on the job.

Joseph Phillippi, an industry analyst with AutoTrends Consulting in Short Hills, N.J., said the flexible Toledo plant will pay off.

‘You design your body shop to accommodate a relatively wide bandwidth of different sized models,’ he said. ‘It can be done, but you have to start from scratch. Toledo was an opportunity to do something like that.’

Bruce Baumhower is president of UAW Local 12, representing 4,800 people on-site and with suppliers
who build and supply the Liberty, Nitro, and Wrangler.

As late as February, when the average price of a gallon of gas was under $3 and consumers were still buying SUVs, Mr. Baumhower had many more members working at area auto plants.

The Toledo facilities are prime locations for the automaker’s new products, he said.

‘When this year started, we had three shifts of people building Libertys and Nitros 24 hours a day, and two shifts of people building Wranglers 20 hours a day. Even if we wanted more product, we didn’t have any room,’ Mr. Baumhower said.

But that isn’t the case now, the labor leader said.

‘I’ve told Chrysler that we’ll build bicycles if it gets our people back to work,’ Mr. Baumhower said. -- Jeep complex’s future intriguing

LOOKS like interesting times ahead and a future for this plant that now makes the NITRO!
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