Jeeps to be Manufactured in Italy for Export to U.S.

    Lost in all of the hubbub of the Romney/Obama/Chrysler/Jeep/China kerfuffle of the past few weeks was this story out of Italy reported by Autonews.com [emphasis added]:

TURIN - ...  In 2014, Fiat introduces the 500X, a replacement for the current Sedici small crossover likely to be built at its Melfi plant in Central Italy alongside a "baby" Jeep Wrangler small SUV for European and U.S. markets. Alfa will launch the 4C spider and possibly a large sedan, a possible substitute for the discontinued 164 sedan. Maserati will begin sales of the Levante luxury SUV, based on the Jeep Grand Cherokee.

    The story was also reported elsewhere, such as Autoblog:

In a bid to fill some of its empty Italian production capacity, Fiat plans to build a pair of small SUVs at its plant in Melfi starting in 2014, according to Automotive News Europe. With most Chrysler plants running at or near full capacity, the Melfi facility will probably build the new Fiat and Jeep SUVs for export to North America. The final decision could come as soon as this weekend. The new small Jeep is expected to replace the Patriot and/or Compass, which are both produced in Chrysler's Belvidere, Illinois plant...
In addition to these new Fiat and Jeep SUVs, the upcoming Chrysler 100 hatchback could also be built in Italy at Fiat's Cassino plant.

    While Italy is not China, Chrysler and the Obama administration pushed back hard against the idea that any Jeep production was being shifted overseas.  At the height of the controversy and a week before the election, Chrysler chairman and CEO Sergio Marchionne wrote a blog post.  In part, he said:

Jeep is one of our truly global brands with uniquely American roots. This will never change. So much so that we committed that the iconic Wrangler nameplate, currently produced in our Toledo, Ohio plant, will never see full production outside the United States.
Jeep assembly lines will remain in operation in the United States and will constitute the backbone of the brand.
It is inaccurate to suggest anything different.

    Marchionne, though not a politician, seems to have chosen his words carefully and precisely.  For instance, "the iconic Wrangler nameplate, currently produced in our Toledo, Ohio plant, will never see full production outside the United States."  He went on to say, "Jeep assembly lines will remain in operation in the United States", and not "Jeep assembly lines will remain in operation only in the United States."  As I noted in my original post on this story (before national attention became focused on it,) Marchionne's comments in 2011 regarding Jeep and especially the Wrangler were a bit more sweeping:

“This [Toledo, Ohio] plant has been at the heart of what we’ve done. I’ve said publicly that I would never build the Wrangler outside the U.S. and outside of Toledo. These are things that are unthinkable — to assemble a Wrangler somewhere else,” Marchionne said in November, 2011.

 So what is this "'baby' Jeep Wrangler" planned for the Melfi plant in Italy for export to the U.S.?  Will Chrysler give it a different name to keep Marchionne's pledge technically intact?  Wasn't one of the ideas that made foreign production of Jeeps so unthinkable was the importing of those Jeeps with "uniquely American roots" into the United States?  But that sounds very much like Fiat's current plan.  And if that's not enough, there's the more ominous albeit less clear statement in the Autoblog story that says "The new small Jeep [built at the Melfi, Italy plant for export to North America] is expected to replace the Patriot and/or Compass, which are both produced in Chrysler's Belvidere, Illinois plant."  A foreign-built Jeep exported to the U.S. to "replace" an American made model?  How could that be spun as good news for U.S. jobs?

    There is no question that Jeep production in the U.S. is thriving and that it appears no current Jeep-related Chrysler jobs in the U.S. are in direct jeopardy.  However, the argument could be made that if Jeeps are being made in Italy for export to the U.S., those vehicles and the jobs created to build them could be American made cars and jobs.
     Perhaps in an effort to deflect criticism from the Romney campaign, Chrysler overshot the truth in its claims just as the Romney campaign did with their initial claim that "all Jeep production" was going to be shifted to China.  Unfortunately, the Romney campaign never fully retracted its candidate's original erroneous statement, choosing to simply switch the focus to more general assertions that the U.S. automaker was creating jobs overseas.  It remains to be seen if Chrysler will set the record straight about its plans for Jeep production, particularly the Wrangler brand, and how that squares with Marchionne's public statements.

Update on the Jeep Story [Updated]

    Mitt Romney made some news today by citing the story about Chrysler considering restarting production of Jeeps in China.  CBS reports:

On Thursday, Romney told a rally in Defiance, Ohio, site of a General Motors plant, "I saw a story today that one of the great manufacturers in this state Jeep -- now owned by the Italians -- is thinking of moving all production to China. I will fight for every good job in America. I'm going to fight to make sure trade is fair, and if it's fair America will win."

     The problem was in the phrase "thinking of moving all production to China."  The way the Bloomberg was written gave rise to the misinterpretation with the following sentence:

Fiat SpA (F), majority owner of Chrysler Group LLC, plans to return Jeep output to China and may eventually make all of its models in that country[.]

    Another sentence was also misleading and rather awkwardly written:

[Mike Manley, chief operating officer of Fiat and Chrysler in Asia said]“We’re reviewing the opportunities within existing capacity” as well as “should we be localizing the entire Jeep portfolio or some of the Jeep portfolio.”

    However, further into the story, the following statement appears:

 Manley referred to adding Jeep production sites rather than shifting output from North America to China. 

    My post on Wednesday (the first blog to note the story as far as I can tell*) included this quote which was unfortunately absent from some of the other sites which picked up the Jeep story later (one of which was linked to by the Drudge Report on Thursday.)  The Romney campaign apparently passed on the story to Mitt Romney without the clarification.  Left wing media and the Obama campaign jumped on the misstatement, and Chrysler even wrote a blog post to clarify the misinterpretations of the Bloomberg story.

    Besides the hit to Romney's credibility, the most unfortunate part of this episode is that it distracts from the point I was originally making by citing the story.  The Obama campaign has made much hay out of Romney being an "outsourcing pioneer." Then, in the same week the Obama campaign released its second term agenda which includes a photo (at right) of Obama speaking at a Jeep factory touting American jobs, a story comes out that Chrysler, one of the administration's success stories, in thinking about jobs in China.  Personally, I don't have a problem with that and neither do most conservatives.  But the Obama campaign hasn't touted creating jobs in China, and now that irony will be largely obscured.

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*Update:  I found this reference to the Bloomberg story originally posted on 10/22 at a blog called FidoSysop's Blog and Forums.

Ohio, Obama, and Optics: Chrysler Considers Building Jeeps in China

UPDATE here.

    This week, the Obama campaign released a glossy 20-page booklet laying out the President's second term agenda.  On page 3, there is a section entitled "Reviving American Manufacturing":

Manufacturing and technology are the life-blood of middle-class families and key engines of the American economy, sparking innovation, generating higher-wage jobs, and strengthening entire communities. But we can’t create an economy built to last if America doesn’t make things the world buys.

The backdrop for the page is the following photo:

    The photo was taken on June 3, 2011 at a Chrysler plant in Toledo, Ohio, where the president gave a speech.  That's a Jeep Wrangler in the background.

    In a potentially embarrassing coincidence, the following story appeared at Bloomberg on Monday, the day before the booklet was released:

Fiat SpA (F), majority owner of Chrysler Group LLC, plans to return Jeep output to China and may eventually make all of its models in that country, according to the head of both automakers’ operations in the region.
Fiat is in “very detailed conversations” with its Chinese partner, Guangzhou Automobile Group Co. (2238), about making Jeeps in the world’s largest auto market, said Mike Manley, chief operating officer of Fiat and Chrysler in Asia. Chrysler hasn’t built Jeeps there since before Fiat took control in 2009.

    The story does go on to suggest this would not affect its plants in the United States:

Chrysler currently builds all Jeep SUV models at plants in Michigan, Illinois and Ohio. Manley referred to adding Jeep production sites rather than shifting output from North America to China.

    However, a related story at AutoGuide.com notes [emphasis added]:

Jeep is considering shipping its manufacturing to China in a cost-saving measure on the heels of weak European demand.
Weakness in the European auto market lead to slow sales for Chrysler but strong demand in China buoyed the brand. In fact, business in China is good enough that Chrysler might transplant its manufacturing operations. Should brand execs pull the trigger, it would mark the first time Chrysler built Jeeps in China since before 2009 when Fiat took a stake in the company.
That contradicts what Fiat-Chrysler CEO Sergio Marchionne said almost a year ago amid concerns that Wrangler production might move from its current plant in Toledo, Ohio.
“This plant has been at the heart of what we’ve done. I’ve said publicly that I would never build the Wrangler outside the U.S. and outside of Toledo. These are things that are unthinkable — to assemble a Wrangler somewhere else,” Marchionne said in November, 2011.
But what was unthinkable a year ago might not seem so foreign. Manufacturing Jeep products in China could help the company save money while feeding a growing market with reduced expenses.
Mike Manley, Fiat Chrysler’s COO in Asia, seems bullish of the possibility. “The volume opportunity for us is very significant,” he, said to Bloomberg. “We’re reviewing the opportunities within existing capacity.”
Jeep’s sales in China more than doubled this year to 33,463 units through September, which could encourage the move further.
Despite that, moving all of the brand’s production to China wouldn’t sit well with American consumers.

    Most agree this election will turn on the economy and jobs.  For a campaign concerned about "optics," the timing of this story could not be worse.   And with Ohio's position as the number one battleground state in the upcoming election, the location couldn't be worse, either.