Chrysler LLC's proposed alliance with Fiat S.p.A. could lead to production of Fiat-based models in as many as three Chrysler plants in North America.

The factories in line for more work are Toluca, Mexico; Sterling Heights, Mich.; and Belvidere, Ill. Those plants already build unibody vehicles, as all Fiat's models are. Two other Chrysler plants that produce larger unibodies are less likely to be used: Brampton and Windsor, Ontario.

Brampton builds the rear-drive Chrysler 300 and Dodge Charger and Challenger cars. Windsor produces the Chrysler Town & Country and Dodge Grand Caravan minivans along with the Volkswagen Routan.

Analysts say the unibody plants could be revamped to produce Fiat-based vehicles, all of which would have the body and platform welded into a single unit.

"They're not talking about bringing over a ton of Fiat products," said Laurie Harbour-Felax, president of Harbour-Felax Group, a Detroit area manufacturing consultancy. "We're talking about one or one and a half factories. I don't think we'll be seeing four plants getting Fiat products."

A viability plan submitted by Chrysler last month to the Obama administration's automotive task force indicated six Chrysler vehicles based on four Fiat platforms for North American production. Those vehicles include a mini Jeep, subcompact hatchback, compact sedan, compact SUV and mid-sized sedan; also included is a "compact specialty SUV" due in 2014.

Toluca advantages

Fiat insiders told Automotive News that Toluca also is being considered for production of the popular Fiat 500 minicar, one of five Fiats and Alfa Romeos being considered for U.S. production. The 500 could be exported from Mexico to the United States and also to Brazil. Mexico and Brazil have a free-trade agreement.

Toluca will have excess capacity because Chrysler is phasing out the PT Cruiser this summer, leaving only the Dodge Journey crossover at the plant.

Fiat and Chrysler are also considering the mini Jeep, based on the next generation of the Fiat Panda Cross. Like the 500, it is based on Fiat's A platform. Harbour-Felax said Toluca is a good option.

"It's in a low-cost country," she said. "Since we're talking about small cars Fiat is going to bring over here, labor cost will be a concern. The lower they can get the labor cost, the better the margin they'll be able to get on that vehicle."

In 2006, Chrysler invested $1 billion at Toluca to improve flexibility and add a supplier park.

The problem with Toluca, Harbour-Felax said, is that it is in Mexico. And Chrysler is seeking $5 billion more from the U.S. government. That could make the deal a "difficult sell," she said.

Michigan, Illinois options

Chrysler's Belvidere and Sterling Heights plants also would make good options. Harbour-Felax said Chrysler and Fiat need maximum flexibility to shift models among plants.

"Sterling has the most recent update, it has the latest equipment and is the most flexible," she said.

In 2006, Chrysler spent $300 million on a paint shop renovation and expansion, $278 million on the assembly line and $228 million in the adjacent stamping plant. Those upgrades were made before the launch of the Chrysler Sebring and Dodge Avenger mid-sized sedans.

Those sedans performed dismally in the market. A Fiat-based replacement could be built at Sterling Heights.

Chrysler also invested $419 million in Belvidere before the launch of the 2006 Dodge Caliber small car. Belvidere also makes the Jeep Compass and Patriot crossovers.

Said Max Warburton, an auto analyst at Bernstein Research in London: "The vast majority of Chrysler's other plants are geared up to produce ladder-frame pickups, large SUVs or minivans."