FCA to invest $1.05 billion to retool Ohio, Illinois plants to build Jeeps

Dodge Dart output to end in September

July 14, 2016 01:00 AM

BLOOMBERG

A Jeep Compass on the production line at Fiat Chrysler's assembly plant in Belvidere, Ill., in Feb. 2012. The company will shift output of the Jeep Cherokee from a Toledo factory to the Illinois plant in 2017 at a cost of $350 million. Output of the Dodge Dart will end in September and production of the Jeep Compass and Jeep Patriot will cease in December, FCA said.

Editor's note: An earlier version of this story incorrectly suggested that Jeep's global sales fell in 2011.

Fiat Chrysler said Thursday it will invest $1.05 billion in assembly plants in Ohio and Illinois to bolster Jeep output.

The carmaker will invest $350 million to move production of the Jeep Cherokee from Toledo, Ohio, to Belvidere, Ill., as part of a strategy to revamp its North American manufacturing footprint over the next year and a half to focus on light-truck output in the U.S.

Output of the Dodge Dart compact car and the Jeep Compass and Patriot, which are currently made at the Belvidere factory, will cease by the end of 2016. Earlier this year, CEO Sergio Marchionne said FCA is looking to outsource production of the Dart and the low-selling Chrysler 200 to a partner.

The Compass and Patriot are being replaced by one SUV, which will be shown at the Los Angeles auto show later this year and will be produced in the Toluca, Mexico, plant.

Toledo plans

FCA said it also will invest $700 million in the Toledo North assembly plant to make way for the next-generation Jeep Wrangler. About 700 jobs will be added in Toledo, the company said, keeping in line with Marchionne’s earlier promises that switching up Jeep production would not result in job losses in Toledo.

FCA didn’t confirm any changes for Toledo South, but it is widely expected that the long-anticipated Jeep pickup truck will be manufactured there. FCA has said the Jeep pickup will be launched in early 2018.

An announcement of changes for the Toledo South plant is expected to come by the end of the third quarter.

Jeep's legacy

This week marks the 75th anniversary of Jeep, which started in Toledo when Willys-Overland Motor Co. received a contract to produce a vehicle for the American military to use on the battlefield during World War II.

The city of Toledo and JobsOhio, a regional business group, worked with FCA to keep Jeep manufacturing in the city.

“Continuing the heritage of Jeep in Toledo, we are thrilled that FCA is investing $700 million with a focus on the future of the next generation of the Jeep Wrangler,” said JobsOhio President John Minor.

Jeep sales have been a strong driver for FCA. The brand sold 1.2 million vehicles globally in 2015, its sixth straight year of growth and fourth consecutive year of record sales. Jeep's U.S. sales grew 16.5 percent to 468,131 during the first half of 2016.