Special Coverage

Management Briefing Seminars

TRAVERSE CITY, MI – The next Jeep Grand Cherokee will feature a platform developed with Mercedes-Benz that will shoulder “a new generation of world-class vehicles” for global markets, Chrysler LLC reveals at the Management Briefing Seminars here.

The unibody vehicle, powered by Chrysler’s new Phoenix 6-cyl. engine, also will feature axle designs and other new technology, Chrysler Vice Chairman and President Tom LaSorda says while announcing the auto maker’s $1.8 billion investment in its intended production site, Jefferson North Assembly in Detroit.

The plant upgrade will accommodate new manufacturing systems in a 285,000-sq.-ft. (26,500-sq.-m.) expansion featuring a flexible body shop that will allow higher output and the production of a variety of vehicles, including products much smaller than the current Grand Cherokee midsize SUV.

The new Grand Cherokee platform will be highly “sought-after” within Chrysler, but it won’t find its way into any Mercedes products.

“This was a common development platform from the early days with Daimler,” LaSorda says, referring to Chrysler’s time as Mercedes’ stablemate under Germany-based Daimler AG. “Their (Mercedes’ platform) is going to be differentiated from ours, but there was a lot of joint (research and) development work on this platform.”

However, the Jefferson plant will not build Mercedes products based on the platform, nor will there be actual component sharing.

The plant also will benefit from numerous green initiatives, such as advanced energy-efficient lighting and a system that will use solid waste and paint sludge for fuel. The move will keep more than 400 jobs in Michigan, LaSorda says.

Aside from the investment announcement, LaSorda points to the world’s swiftly growing emerging automotive markets and reiterates Chrysler’s desire to expand sales outside North America.

By 2018, light-vehicle sales in Brazil, Russia, India and China, the so-called BRIC countries, will hit 27 million units annually and account for 80% of new incremental sales, he says.

Russia already is the largest European market for Toyota Motor Corp., Nissan Motor Co. Ltd., Mitsubishi Motor Corp., Hyundai Motor Co. Ltd., Kia Motor Corp. and General Motors Corp.’s Chevrolet brand, LaSorda says, adding Russia’s GAZ Group just launched production of the Volga Siber, a version of the former Chrysler Sebring adapted for the Russian market.

GAZ bought the tooling from our Sterling Heights (MI) assembly plant to produce the car,” he says.

Chrysler will expand in these markets through alliances and partnerships similar to the two dozen it already has established with OEMs and suppliers globally, including a deal to get a version of the Nissan Versa B-segment car for South American markets beginning in 2009 and an all-new B-segment car for North America, Europe and other markets in 2010.

Chinese auto maker Chery Automobile Co. Ltd. also is building a Chrysler-designed small car for foreign markets that will be out next year, although it has been held up to make engineering improvements Chrysler deemed necessary, LaSorda says.

“Our engineers are estimating it can be ready by the end of the year, but we’ll see what happens. That’s the biggest delay in that product program . . . it did not meet our standards to be able to ship it.”

Meanwhile, Chrysler will produce for Nissan a fullsize pickup based on the Dodge RAM in Mexico starting in 2011. It also is building the Chrysler minivan-based ’09 Routan in Windsor, ON, Canada, for Volkswagen AG.

LaSorda says Chrysler’s expertise in manufacturing cars and light trucks could be a benefit in Russia, where the technology is not as advanced and the market is growing at breakneck speed.

Chrysler sees SUVs growing to 20% of the Russian market and combined D- and E-segment large cars hitting 24%.

Heavy duties, tariffs and taxes make local manufacturing there – and in the other BRIC countries – a necessity, LaSorda adds.

Other highlights:

  • LaSorda confirms Fiat Automobile SpA has approached Chrysler about projects but he does not elaborate. “At this stage there are no formal discussions going on, but there was an inquiry.”
  • NThe first small-car project with Nissan is on track for late 2010, to be produced in Japan and sold worldwide. Chrysler is getting ready to sign off on the final design in September. All the styling was done by Chrysler, LaSorda says. A name has been chosen and currently is being vetted by Chrysler’s marketing and legal departments.
  • LaSorda predictably is pleased that Ford Motor Co. has decided to delay the introduction of its new F-150, because Chrysler’s marketing efforts for the new Ram now will not overlap Ford’s.
  • !Chrysler’s payments to suppliers are at about 45 days, but LaSorda says the auto maker now is making multiple smaller payments throughout the month in some cases to help its own working capital and supplier cash flow. “That helps us avoid the peaks and valleys of cash flow,” LaSorda says.