Chrysler is set to plough $1.7 billion into new Jeep models, creating more than 1,000 jobs in 2013 in its Toledo factory in Ohio. The money will be used to construct replacements for small S.U.V. models Jeep Liberty and Dodge Nitro for export as Chrysler seeks to grow its overseas market share in countries, including China and Russia.
Chrysler’s Toledo plant represents close to 2,000 jobs at present. The company will invest $500 million in upgrading the Toledo plant, including a body shop. New employees will start off at an hourly rate of $15. The company recently tried to cut out a 25% cap on entry-level employees that comes into play in 2015, but was blocked by the union during labor negotiations.
At present, Chrysler has close to 3,000 entry-level workers, over 10% of its hourly workforce. Workers earn close to $30 an hour, twice the entry-level rate for new employees. The carmaker is seeking to eliminate its two-tier wage structure.
The lower hourly rate has enabled the company to take on new workers. Rather than bringing down current workers’ wages to bring wages in line, the company will likely allow retirement phase out the higher wage rate workers.
By 2015, Chrysler plans to add over 2,000 jobs under a contract with United Auto Workers, which puts the hourly rate of pay for employees taken on after September 2007 will jump by more than $4.50 to over $19.
Wages of UAW workers taken on before the same date will not increase through 2015.
Jeep Wrangler Lauded For Top Performance
Chrysler’s 2012 Jeep Wrangler has been awarded the Automotive Lease Guide’s Residual Value Award, a good sign for the company’s latest offering as the award recognizes cars that will see the lowest percentage of depreciation from their initial price after three years.
The Jeep’s 3.6-liter V-6 engine boosts fuel efficiency, and has 40% greater horsepower at 285.
Another positive sign for the 2012 Jeep Wrangler is automotive valuation firm Kelley Blue Book’s forecast that it will keep its value ahead of any other vehicle over the next five-year period. According to Kelley Blue Book, the Wrangler will lose only 45% of its original price over the next five years, earning it first place in the compact vehicle category, with 10% less depreciation compared with the 2011 Wrangler.
Fiat 500 sales to be fuelled by 20 new US dealerships
Meanwhile Chrysler aims to open 20 US dealerships in early 2012, having fallen short of its Fiat 500 sales goals in North America. Fiat 500 sales in 2011 through October reached just over 21,000, a long way off the company’s 50,000 target for 2011.
The Abarth, the performance version of the Fiat 500, is expected to hit showrooms early in 2012. To date in 2011, Chrysler has opened over 120 US Fiat outlets. The company expects it will have opened 130 outlets by the end of 2011, and 150 by the end of March 2012.
Key Statistics – US Sport Utility Vehicle Sales By Ranking; October 2011 (source: GoodCar BadCar)
Brand Oct 2011 Oct 2010 YTD
1. Honda CR-V 19,326 18,040 180,361
2.Ford Escape 19,046 14,578 206,896
3. Chevrolet Equinox 15,108 12,773 160,143
4. Honda Pilot 12,466 8,169 94,169
5. Ford Explorer 11,987 3,692 108,944
6. Jeep Grand Cherokee 11,084 12,72 196,853
7. Toyota RAV4 10,680 14,694 106,800
8. Kia Sorento 10,178 10,611 109,903
9. Nissan Rogue 10,034 8,862 101,412
10. Jeep Wrangler 9,892 7,908 101,820