Chrysler execs consider construction of third plant in North America

Article by Anita Panait, on February 5, 2014

Top executives at Chrysler Group are debating whether to build a third pickup site in North America to meet strong demand for Ram pickups, chief executive Sergio Marchionne said during a recent conference call to discuss the carmaker’s $1.6 billion fourth-quarter profit. Marchionne has vowed during the recession that he will never build another assembly site in North America.

To meet strong demand for Ram pickups, Marchionne says he prefers to run existing pickup plants in Warren, Mich., and Saltillo, Mexico, "flat-out." He believes that Chrysler could hike its pickup output by 15 or 20 percent without having to build an additional plant. He noted that the odds of building a new plant in North America are "under 50 percent."

Chrysler posted a 21-percent surge in sales of Ram pickups, which were re-engineered for the 2013 model year, to 355,673 units. The gain was larger than the overall growth of all full-sized pickups in the United States, which rose by 17 percent.

The debate was disclosed on the day that Fiat SpA’s board of directors elected to rename itself as Fiat Chrysler Automobiles NV. Fiat also unveiled a new corporate logo and said it would retain its current four global operating regions. Other management structures would stay as they are, including the 20-member global Group Executive Council.

Once the decision is by Fiat shareholders, the new company will be incorporated in the Netherlands and will be domiciled in the United Kingdom for tax purposes. The new company will be listed primarily on the New York Stock Exchange and secondarily in Milan. The timing and location of the shareholders meeting have yet to be disclosed.

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