Chrysler to boost output of 2013 Rams, V-6 engines
Marchionne cryptic on Santander talks
Chrysler-Fiat CEO Sergio Marchionne, speaking Thursday in Detroit on the European auto industry's problems: "The system is unstable, and it needs to be fixed."
Photo credit: Bloomberg
DETROIT -- Chrysler Group will add a third shift in March at its Warren Truck plant in suburban Detroit and revamp part of its Mack Engine complex in Detroit to make more Pentastar V-6 engines.
The moves represent about $238 million in further investment in the Detroit area and will add 1,250 jobs, a Chrysler spokeswoman confirmed. A formal announcement is planned at 11:45 a.m. at the Mack plant with Chrysler CEO Sergio Marchionne and Detroit Mayor Dave Bing.
The engine production increase will ease the company's tight supply of 3.6-liter V-6 engines, which power most of Chrysler's lineup of larger sedans, minivans, pickups and SUVs. Pentastar production could be any variation, including 3.6- and 3.2-liter versions, the company said.
Chrysler also is set to announce a $40 million investment in a portion of the Trenton Engine plant in suburban Detroit.
Trenton builds the 3.6-liter V-6. Soon, it will begin making a 3.2-liter version for the upcoming replacement of the Jeep Liberty, as well as additional inline-four Tigershark engines that are now built only in Dundee, Mich.
Chrysler said it would add the third shift at Warren Truck in the spring, but didn't offer a more specific date. The third shift has been discussed since before the company debuted the re-engineered 2013 Ram pickup, which began arriving in dealerships late last month. The pickup has a new optional powertrain that pairs the 3.6-liter V-6 with Chrysler's Torqueflite eight-speed transmission to deliver fuel economy of up to 18 mpg city/25 highway.
Chrysler sold 238,815 Rams this year through October -- a 20 percent gain over last year in an overall market that has gained 14 percent.
The Mack II plant, part of the Mack Engine complex that was idled last year, had been considered as a site for assembly of the Maserati Levante, which was to have been built alongside the Jeep Grand Cherokee at Chrysler's Jefferson North Assembly plant in Detroit. But Marchionne, also the CEO of Fiat S.p.A., revealed a new production plan on Oct. 30 that moved production of the Maserati SUV back to Italy.
Speaking to reporters after the announcement, Marchionne said he hopes Chrysler's re-engineered Ram 1500 pickup could knock the Chevy Silverado out of the No. 2 slot in the segment, behind the Ford F-series.
"We're seeing very stable demand on the truck side, and we've had some success in positioning our product lineup," Marchionne said, mentioning the Ram's 25 mpg highway fuel economy. He said the pickup "has the highest level of technology in the segment, and I expect it to do very well."
Marchionne was cryptic when asked about Chrysler's reported talks with Spanish lender Santander to replace Ally Financial as the automaker's preferred lender, and whether it might lead to Chrysler once again having a captive finance arm.
"Reality shapes itself in a variety of ways. Just wait," he said.
The 60-year-old CEO did spend time discussing how the ongoing crisis in Europe is harming Fiat and other automakers. He said Fiat, though hurting, is still profitable because it has worldwide operations to offset losses in Europe. But the situation in Fiat's home continent is growing desperate.
"We're reaching levels of instability where some of the other players don't have a balanced portfolio of geographies, and so they're taking it all on the chin," Marchionne said. "That becomes such a painful succession of blows that eventually, you cave in."
Cash running out?
He said efforts by individual European nations to prop up their car companies at the expense of others call into question whether the European Union itself is sustainable.
"The system is unstable, and it needs to be fixed," Marchionne said. "If you look at the collective losses that we have, that Ford has, that GM has, and that Peugeot has in the European arena, the collection is enough to choke a horse."
You can reach Larry P. Vellequette at email@example.com.