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Chrysler: $1.7 Billion Investement In New Jeep SUV Brands

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Chrysler’s Toledo plant represents close to 2,000 jobs at present. (Photo: G. Seguin)
Chrysler’s Toledo plant represents close to 2,000 jobs at present. (Photo: G. Seguin)

BUSINESS

  • Chrysler’s Toledo plant to see 1,000 jobs in 2013, $500 million investment
  • Chrysler’s 2012 Jeep Wrangler receives ALG’s Residual Value Award
  • 20 new US dealerships to open in 2012, boosting Fiat 500 sales

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

By Ellsy O'Neill for
Ellsy O'Neill is a Paris-based writer, proofreader and translator. She covers industry, culture and current affairs.

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