Monday, July 18, 2016

Chrysler adding jobs while other brands are hurting

David Firester

Read automotive news headlines and it seems like bad news is the talk of the town. Recalls, autopilot issues, and brands hemorrhaging cash both here and abroad. But at least one American brand is reporting good news this week. Fiat Chrysler is investing over a billion dollars to upgrade two Midwest auto plants, creating upwards of 1,000 jobs in the process. Good thing, since the company lost about that many jobs earlier this year.

Production of the Jeep SUV

Those layoffs, at the Chrysler 200 plant in Detroit, were the big bad news headline back in April, but it looks like that was just the first in a two-part plan the automaker has to better respond to consumer demand for fewer sedans and more crossovers and SUVs.
In fact, job one of this new expansion will be to increase production of the Jeep SUV while continuing to make cuts in the small car market. As the Indiana-based plant gets an infusion of cash, it will also get new and different marching orders. Stop making the Dart, Compass, and Patriot – which are all being discontinued – and double down on the popular Jeep Cherokee.
While the company hasn’t said yet which vehicle will replace these smaller SUVs in the model lineup, they did quietly admit it would likely be made in properly equipped plants in Mexico.

PR plays a role 

The move illustrates a typical PR tightrope American manufacturers must walk when dealing with market realities. They want – no, they need – to make the customer base happy by giving them more of what they want, and they need to keep their investors happy by cutting losses and eliminating losing models. In the meantime, they have to deal with very public and extremely vociferous and skilled PR teams from the employee unions, particularly the UAW, which was not happy with the layoffs last April, and will likely balk at the business being sent south of the border.
It will be up to Fiat Chrysler’s PR team to promote both the consumer-attuned business decisions while also touting the new jobs to help placate the unions and disgruntled auto workers now out of a job in Michigan. Again, it’s a tightrope, and you don’t make everyone happy. But when you get two out of three, you pretty much call it a win.
David Firester is an intelligence analysis expert .

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