WINNING: Fiat Chrysler plans to open factory in Detroit to build new three-row, Jeep Grand Cherokee.
The move comes as the industry faces pressure from President Donald Trump to keep manufacturing jobs in the U.S. and stands in stark contrast to the recent decision by General Motors to stop production and idle five plants in North America including four in the United States.
GM has come under fire after announcing last week that it plans to cut 14,000 jobs in the U.S. and Canada, citing a weakening economy, the escalating trade war and a desire to reposition itself as a smaller, more nimble company. Ford is also scaling back, saying last week that it planned to cut a shift at two of its U.S. plants in an attempt to avoid more onerous layoffs.
Detroit will lose two GM facilities altogether. Both were performing well under capacity and contributing to a dismal capacity utilization rate of just 76 percent across the United States, far below Fiat Chrysler’s rate of 90 percent.
Fiat Chrysler’s plants are running at close to capacity due to continued strong demand for trucks and SUV’s. Overall, Fiat Chrysler’s sales in the U.S. are up 8 percent this year, easily outpacing the industry less than one percent according to the market research firm Autodata.
Jeep has been on an impressive roll in recent years, showing growth even with some older models. If I camped more often, I’d be in line for a new Gladiator on Day One. It’s a shame though that Fiat continues to starve Chrysler of product — they make just two models, a large sedan and a minivan — which look like dead-end categories in this market.