What's Chrysler Group L.L.C. going to do now that it's wiped out a $7-billion-plus government loan through what may be the fastest bankruptcy ever? Mexico sounds nice.
The No. 3 (at least for now) U.S. automaker may build the Fiat 500 subcompact in Mexico, the Wall Street Journal reports. Chrysler's plant in Trenton, Michigan, may build the engine for the 500 and another as-yet-unnamed Fiat subcompact in the U.S., the paper said. Chrysler -- now 20 percent owned by Italy's Group SpA and 8 percent by U.S. taxpayers -- declined to comment.
If the news is accurate, it would be another bit of good news for the beleaguered auto industry, which has seen sales rebound somewhat, thanks to the Cash for Clunkers program. In July, Chrysler's sales soared 30 percent from June. Nonetheless, the move is bound to anger members of the United Auto Workers -- and some of Congress -- who questioned the value of the auto industry bailout from the start.
"We do have some heartburn over the jobs going to Mexico," says Vince Precopio, president of Trenton, Michigan–based UAW Local 372. Precopio says his union has had no official confirmation of Chrysler's plan, though the plans have been discussed in the media.
Should Chrysler decide to build a new engine, or even a new car, it may face the hurdle of finding qualified workers. More than 122,000 jobs have been cut by the auto industry this year, as Chrysler and General Motors Corp. reorganized through bankruptcy. And considering the state of the industry, many of these workers probably are seeking training in other fields -- so finding people to start up new production lines may be a challenge.
"It's not something that you can walk of the street and catch onto," Precopio said.
But building in Mexico would be logical for Chrysler. The automaker already has five plants in Mexico, building the PT Cruiser, the Dodge Ram Pickup, and the Dodge Journey crossover. Sen. Claire McCaskill of Missouri is urging Chrysler to reconsider its decision to shutter two plants in her state and move the work to Mexico, where the automaker employs about 5,000 workers.
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