Last Updated: November 27. 2010 4:17PM
Fiat to produce Jeeps in Italy
Joint venture with Chrysler to provide vehicles mainly for North America
Christine Tierney / The Detroit News
Sergio Marchionne, chief executive of Fiat SpA and Chrysler Group LLC, outlined plans Friday to build cars and SUVs for the Jeep and Alfa Romeo brands at a plant in Turin, Italy.
The $1.3 billion venture, whose cost will be split between the two carmakers, marks a further step in the integration of their product planning and manufacturing.
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Fiat described the deal as "the first tangible example of the benefits brought by the Chrysler alliance" established last year.
Compact and midsize vehicles built on the same platform are slated to go into production at the Mirafiori plant in the second half of 2012, in time for the launch of future Jeep and Alfa Romeo models, Marchionne told Italian unions.
More than half the vehicles will be sold in other markets, North America, in particular.
In exchange for the commitment to increase output to as many as 280,000 vehicles a year, Fiat is pressing for more flexible work rules at the plant. It produced 178,000 vehicles last year.
Italian union leaders welcomed the plan. The Mirafiori plant, built in 1937, is one of the biggest in Italy, employing around 5,500 workers.
The impact on Chrysler was less clear, but the U.S. automaker will supply U.S.-built transmissions as well as V-6 engines from a Trenton plant for vehicles built in Italy but destined for North America.
"This is just a slice of the cake that is the partnership between Chrysler and Fiat," Chrysler spokesman Gualberto Ranieri said of the venture.
"We can't look at each individual slice — what is the benefit here? What is the benefit there?"
Fiat, 20 percent owner of Chrysler, will produce some of its vehicles in North America. It is making a version of the tiny Fiat 500 at a plant in Mexico.
This week, Fiat said it would produce a Maserati-brand SUV at the Jefferson North plant in Detroit, using the underpinnings of the Jeep Grand Cherokee.
According to Fiat, the platform at the heart of the new venture was the most advanced vehicle architecture available. Originally designed as the base for the Alfa Giulietta car, it was developed further by Chrysler engineers.
The platform will be used by both automakers, serving as the underpinnings for all future compact and full-size passenger cars and SUVs, according to Fiat.
To the extent that the new venture helps Chrysler to increase its international sales, it may help Fiat meet the conditions necessary to increase its holding in Chrysler to 35 percent.
The sharing of platforms and technologies between Chrysler and Fiat contrasts sharply with the reluctance to share parts among Mercedes-Benz and Chrysler's mainstream Chrysler, Dodge and Jeep brands during the DaimlerChrysler merger.
Separately, Dow Jones International News reported that Fiat would unveil a mid-size SUV next year based on the Dodge Journey.
ctierney@detnews.com
(313) 222-1463
From The Detroit News:
http://detnews.com/article/20101127/AUTO01/11270357/Fiat-to-produce-Jeeps-in-Italy#ixzz16iLz0U2G
