The shift is said to be part of a quid-pro-quo agreement with United Auto Workers leaders, according to an Automotive News report. Both parties recently concluded negotiations for the UAW’s next contract, which primarily focuses on wages and healthcare but can also include production provisions.
Union officials are said to have agreed to allow Chrysler 200 and Dodge Dart production to move from Michigan and Illinois, respectively, to a factory in Toluca, Mexico. In return, FCA allegedly agreed to focus future SUV, crossover and pickup production in the US.
A domestic production shakeup is expected to include a retooling of the Toledo Assembly plant to handle a Wrangler-based pickup, while Michigan’s Warren Truck plant will be converted to unibody construction to build the Jeep Grand Wagoneer.
Sales of the Chrysler 200 and Dodge Dart have been growing this year, with respective deliveries up by 112 percent and 13 percent through August, however the combined number for both cars represents less than 10 percent of FCA’s collective sales in the US market. Individually, the Wrangler and Grand Cherokee outsell the combined numbers for both car models.
In a previous interview with Automotive News, FCA chief Sergio Marchionne suggested automakers began moving pickup production out of the US after feeling “threatened” by the UAW, however he conceded that the vast majority of trucks are sold in the US market.
“If you move the truck back here … we could actually make sense of this bloody industry and actually increase the number of people employed in this country and really share wealth because we are making money,” he said.
The union contract still must be ratified by the nearly 40,000 UAW members at FCA factories before the terms are finalized.
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