Marchionne confirms Ram 1500 output switching Mich. plants in 2018

Editor's note: An earlier version of this story gave the wrong compass direction of the Sterling Heights plant relative to the Warren plant. Fiat Chrysler CEO Sergio Marchionne today confirmed that production of the Ram 1500 pickup would move about 10 miles north to FCA’s Sterling Heights Assembly Plant from the Warren Truck Assembly Plant in suburban Detroit. The move would coincide with the start of production of the next-generation Ram 1500 in early 2018, he said.Marchionne, in comments during FCA’s first-quarter earnings call with analysts, also provided more details about the company’s plan to outsource production of the Dodge Dart and Chrysler 200 so it can build more pickups and SUVs.He said FCA would convert Warren Truck to build a family of high-end Jeeps under the Wagoneer and Grand Wagoneer names, and that the replacement for the Jeep Compass and Patriot, known temporarily as the C-SUV, would be built in Toluca, Mexico.Unconfirmed reports of these plans began to surface in September.Marchionne said the product shift would result in a net increase in the number of UAW-represented hourly workers in the U.S., though he did not comment on the impact on salaried positions.“I confirm now that the realignment of the footprint will yield an increase in manpower,” the CEO said.Marchionne said the production realignment in North America “was driven by two conditions: We ran the exercise with the view of not losing one unit of sales in Ram and one unit of sales in Jeep.”He and CFO Richard Palmer said talks with other automakers about building replacements for the Dart and 200 are ongoing. But Marchionne said the company’s decision to outsource production of the Dart and 200 was a direct result of the intense study he did of FCA’s business for his “Confessions of a Capital Junkie” presentation a year ago.“I feel pretty good about what we’ve done,” Marchionne said. “It’s painful, and there’s a lot of intense activity going on right now. I think the next 18 months are crucial.”Marchionne said that the “Capital Junkie” presentation in April 2015 -- which advocated greater consolidation among automakers -- had been productive, though it hadn’t yet borne fruit.For the full Automotive News project on auto industry consolidation, "Industry on Trial," from August 2015, click here.“I think we need to give it more time. In the absence of somebody immediately embracing the concept, I think it would take time,” Marchionne said. “It has been worth the effort, and I would do it again.”He said he continues to have discussions on the topic with other automakers.“I remain hopeful that somebody will pick it up with us and get it done,” Marchionne said.Marchionne also said that, while FCA’s net debt rose in the quarter, the company had too much “unproductive” cash parked on its books. He said the company remained on target to be in a net cash position -- to have more cash on hand than outstanding debt -- by the beginning of 2018.

Marchionne confirms Ram 1500 output switching Mich. plants in 2018

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