Slow Fiat 500 sales bring layoffs at engine plant, UAW says
DETROIT -- Chrysler Group has suspended production this month of the 1.4-liter FIRE engine that powers the Fiat 500 in North America because of slow U.S. sales of the subcompact, a top UAW local official said.
More than 100 of about 400 hourly workers at Chrysler's Global Engine Manufacturing Alliance Plant in Dundee, Mich., were laid off at the start of the month and don't know yet when they might be back on the job, said Tom Zimmerman, the plant's unit chairman for UAW Local 723.
Chrysler spokeswoman Jodi Tinson said the plant "is moderating its schedule to adjust for the current bank of engines." She disputed Zimmerman's numbers, however, saying that about 30 employees at the plant are currently laid off and another 35 are "redeployed" to other parts of the facility.
Internal Chrysler documents dated Nov. 1 and obtained by Automotive News show the automaker with a 184-day supply of Fiat 500 coupes and cabrios available to dealers, some of whom had sold as few as 49 cars between opening in March and Oct. 31. Others have sold as many as 370.
Tinson said the company had a 140-day supply at the end of October, and is "very pleased with the progress we are making with the North American launch of the Fiat brand."
The vehicle's strongest U.S. markets so far are in California and the Southeast, according to initial sales figures, while the weakest regional markets are in the Midwest.
Fiat's return to the North American market after almost 30 years has been slow and consistently behind schedule. The brand's first dealers -- who bid for the rights to sell the 500 and subsequent Fiat and perhaps Alfa Romeo vehicles -- were delayed for several months as they secured local approvals to build mandatory stand-alone stores. The brand's first dealerships didn't open until March, and the number has now reached 130 stores.
CEO Sergio Marchionne had initially predicted annual sales of the Fiat 500 in North America of 50,000 units, but he later backed off the number because of the slow rollout. Through October, Fiat sold just 15,826 units of the 500 in the United States.
This week, Chrysler will unveil the North American version of the Fiat 500 Abarth, a high-performance version of the two-door subcompact, at the Los Angeles Auto Show. The Abarth features a turbocharged 160-hp version of the 1.4-liter engine that also is manufactured in Dundee.
National advertising support for the Fiat 500 didn't start in earnest until the third quarter, with Chrysler contracting pop star Jennifer Lopez to introduce the subcompact to a national audience.
Editor's note: An earlier version of this story gave an initial sales projection of 50,000 units in the United States for the Fiat 500. The figure is for North America.
You can reach Larry P. Vellequette at email@example.com.