Fiat Chrysler Automobiles (FCA) has announced that they have come to a decision to halt the production of cars made in the U.S. This move will transition in early 2017. The reasoning? The company has decided to focus on the RAM and Jeep brands in their U.S. plants, and will be slowly stopping production of Dodge Darts and Chrysler 200s; solely producing pickups and SUVs in America. Moving forward car models will be made in Canada, Mexico, and other outside countries.
The move is just one aspect of Sergio Marchionne’s (CEO of the company) strategic plan to heighten profits margins, to help compete with other auto makers. The Ram and Jeep products have helped enhance the company’s sales as of late, while the Chrysler 200 and Dodge Dart, haven’t done so well.
Marchionne recently stated that there would be ‘no passenger’ automobiles produced in the United States, and the company’s expectation is that this focus will give them more of a possibility to gain closer to the just over 12 percent profit margin GM recently experienced, in its second quarter reports.
The FCA CEO has been at it for a while now, when it comes to matching the company’s North American profit margins to rivals, GM and Ford. There is a good possibility that this re-alignment may help them finally achieve just this. Part of the plan includes moving the replacement for the Jeep Patriot and Compass, south of the border, to Mexico.
A big component of this strategy is halting the Chrysler 200 production in Sterling Heights. The FCA has stated that production will stop by December. It also announced plans to drop $1.49 billion on its Sterling Height plant, to get ready to produce the Ram 1500. Production on this pickup will move from the Warren plant to Sterling Heights, starting in 2018.
MSN reports that another element is moving the Jeep Cherokee to Belvidere, Ill., from Toledo, so that it will have room for an increased production of the Wrangler in the Ohio plant. The company is planning on investing $1 billion to revamp both plants, which will create a total of 1,000 new positions.
Still, regardless of the fact that Fiat Chrysler Automobiles is currently rolling out these plans to stop producing the 200 and Dart models in the U.S., CEO Marchionne stays on point, stating he is searching for a partner, who would be up for the job of making those vehicles for FCA. He goes on to state that he believes FCA has made progress on this. He also notes though, that the company is not ready to announce anything, as of yet.
