toledoblade.com --

A big chunk of Toledo's economic future lies in a computer in Auburn Hills, Mich. - waiting for Wednesday when Chrysler Group LLC will announce what local workers will build for the 110-year-old automaker.

"The Plan," as Chrysler Chairman Sergio Marchionne's anticipated announcement has come to be known, will lay out an aggressive strategy to completely and quickly revamp the automaker's moribund lineup by introducing vehicles and technology from Italian automaker Fiat SpA.

And though it won't be certain until the words are delivered this week, the Toledo area's Chrysler plants - Toledo Jeep Assembly, Toledo Machining in Perrysburg Township, and Global Engine Manufacturing Alliance in Dundee - will get new products with probably hundreds of additional good-paying jobs for the regional economy.

"Fiat needs to export Jeeps, and that means there could be more business faster [at the Toledo Jeep Assembly complex] than anywhere else in the corporation," said longtime auto analyst Jim Hall of 2953 Analytics in subur-ban Detroit.

PLANTS AT A GLANCE

Toledo Jeep Assembly
4400 Chrysler Drive, Toledo
Products: Jeep Wrangler, Jeep Liberty, Dodge Nitro
Production 2007: 221,195
Production 2008: 120,577
Employment: 1,750 for Chrysler; 1,500 for on-site suppliers Toledo Machining Plant 8000 Chrysler Drive, Perrysburg Township
Products: steering columns, torque converters
Employment: 770

Global Engine Manufacturing
5800 North Ann Arbor Rd., Dundee, Mich.
Products: 1.8, 2.0, and 2.4-liter I-4 engines and 2.4-liter turbocharged engines
Employment: 190
Source: Chrysler Group LLC, United Auto Workers Local 12

Mr. Hall could not comment on specific plans the automaker has for the future. But he noted that along with an estimated $8 billion in planned new technology, Fiat has brought "a global and diffuse distribution network" to its strategic alliance with Chrysler.

"The Jeep brand is so strong and the [potential export] market is so wide," Mr. Hall said, "in a good year, you could be talking about six figures of exports for them."

Just 21,713 Wranglers were sold outside North America last year.

Few people know exactly what the new Chrysler chairman will say or whether he will discuss locations where potential products will be produced. Company spokesmen are mum.

According to Chrysler insiders, the theme of Mr. Marchionne's speech outlining Chrysler's plan for the next several years is "expect the expected, and especially expect the unexpected."

Fiat, after Chrysler filed bankruptcy last spring, agreed to take over the Detroit-area company and inject new management, new technology, and new life, while spending few euros. The American public has a stake in the outcome, as $12 billion in taxpayer money was used to help bail out the struggling automaker, which has just a 9 percent share of the U.S. vehicle sales market.

Effect on area plants

The insiders say Mr. Marchionne will reveal a number of technological advancements, including the introduction of eight-speed transmissions with twin alternators across most of the vehicles in its lineup, and introduction of Fiat-based diesel engines in vehicles other than trucks.

But what does that mean for area plants that build or make parts for Jeep, Dodge, and Chrysler vehicles? Lots and lots of change, if previous court filings, executive statements, and insider leaks are accurate.

Consider:

•In proceedings during Chrysler's rapid trip through bankruptcy, executives said their manufacturing plan called for more fully utilizing fewer plants. Several plants nationwide were jettisoned with the remnants of the old company, but the assembly and component plants in and around Toledo were kept.

•Toledo's assembly plants - among the most flexible and efficient in the company's inventory - are operating at less than full-time. New products that would require additional shifts of workers would mean the callback of all remaining laid-off employees and the addition of hundreds of new jobs.

•Executives also indicated that they planned to utilize the award-winning engine plant in Dundee to manufacture engines for its entire lineup of small cars. Demand for the new engines, which will use Fiat's "multiair" technology to boost power and gas mileage, would mean the plant will soon be running at capacity for the first time since it opened in 2006.

•Fiat executives said this year that the Jeep brand was part of the reason they coveted a strategic alliance with Chrysler.

While Jeep is thought to be one of the most recognized automotive brand names on the planet, sales of Jeep vehicles have been largely confined to North America, leaving untapped potential markets elsewhere. In recent weeks, the Toledo Jeep factory, which makes the Wrangler and Wrangler Unlimited, has produced an unusually large number of right-hand-drive Wranglers for export.

•Steven Landry, the company's now-former head of sales and marketing, revealed this year that the slow-selling Dodge Nitro, which shares the Toledo Jeep assembly line with the Jeep Liberty, would be phased out by 2012, the same time the Liberty would be due for a redesign. Without the Nitro, that part of Toledo Jeep would have ample capacity and flexibility to build the Liberty and other vehicles.

Such vehicles, experts have speculated, could include a replacement sedan for the slow-moving Chrysler Sebring and Dodge Avenger, both of which are built at Chrysler's Sterling Heights, Mich., plant, which is slated to close.

Union looks forward

Officials from United Auto Workers Local 12, which represents nearly 4,000 people locally whose livelihoods are tied to Chrysler's SUV production at Toledo Jeep, would not speak specifically about what they've been told of Fiat's plans for Toledo.

But they say Fiat has noticed the productivity of the local work force, the flexible nature of the plants themselves, and the commitment by local union officials to work with the automaker to get things done.

Toledo Jeep and its workers have grabbed top efficiency honors the past two years from a widely respected industry study of all vehicle assembly plants in the United States and Canada.

"Our guys have done a fantastic job over there," said Local 12 President Bruce Baumhower. "They've been called the most productive plant in North America, combined with the fact that we've got Chrysler's most modern facilities in North America, and we know we're going to be a big part of Chrysler's future going forward."

Tracy Handler, who studies Chrysler for IHS Global Insight in suburban Detroit, said Toledo Jeep's Liberty and Nitro factory "is directly competing" with Chrysler's small-vehicle factory in Belvidere, Ill., for future work. Belvidere is where the fuel-efficient Dodge Caliber, Jeep Patriot, and Jeep Compass are manufactured.

Mrs. Handler said that while the Wrangler facility's future is solid, the Liberty and Nitro factory's future is less certain.

"Even if you add some Alfa-Romeo and other Chrysler-based product, if you only have the Liberty built at that plant, that's probably not enough," she said.

She said it "is a good sign" that Toledo Mayor Carty Finkbeiner was invited to attend Chrysler's announcement this week. Public officials from other towns also were invited, but Mrs. Handler implied such invitations likely were offered to those whose cities would hear good news.

Some things associated with Chrysler's Toledo operations won't change in design - specifically, the Jeep Wrangler - but are likely to change in terms of worldwide distribution, analysts say.

"The Wrangler is the ultimate icon of the Jeep brand, so clearly the Wrangler stays in the Jeep plan," said Joseph Phillippi, a longtime industry analyst with AutoTrends Consulting in Short Hills, N.J. "That aspect of the Toledo complex should be in good shape. I assume that the Liberty will stay in the portfolio in some way, and that the Nitro will go away."

Mr. Phillippi said he was invited to Chrysler's secluded testing grounds in Chelsea, Mich., last month, where he saw a test vehicle for what he said "might be the next Liberty." He said the vehicle, albeit cobbled together, "looked more like a crossover than something that would be trail-rated."

Dealers hopeful

No group may be as financially invested in Chrysler's product future as its beleaguered dealer network.

With sales of Chrysler-made vehicles down 40 percent this year, while the rest of the industry is off 27 percent, Chrysler has dropped market share and slashed 789 dealers from its sales network to try to improve sales at remaining dealers.

Yet even after two years of turmoil, dealers say they can still have faith in the company, especially if they see hope on the horizon this week.

"A look into the future is what all the dealers want to see," said John Yark, of the Yark Automotive Group in Sylvania Township. "The product that they're going to have is the most critical piece of the future."

Toledo is one of the largest metro areas in the country where Chrysler-built vehicles maintain a leading market share, but a lack of technological investment by Chrysler's two previous owners, German-based Daimler AG and private-equity firm Cerberus Capital Management Inc., has exacted a toll on Chrysler's product lineup, Mr. Yark said.

"Chrysler needs technology, and at the end of the day, Chrysler needs product," Mr. Yark said. He is encouraged about the rumored advances expected to be announced by Mr. Marchionne.

"Frankly, it's kind of exciting that they're going to get this infusion of Fiat technology, especially in the small cars."

While analysts believe Chrysler's regional operations are secure for now, the tumult in the global automotive market will require patience as the industry rebounds.

"The new operations in Toledo are well-protected, and the [Dundee engine] plant is very efficient. They're not going to just throw those away," said David Cole, director of the Center for Automotive Research in Ann Arbor.

"The real question is, can [Fiat] turn Chrysler around and be profitable without a lot of new products coming right away while their competitors have all kinds of new products coming?

"My advice would be to hang in there."

Contact Larry P. Vellequette at:
lvellequette@theblade.com
or 419-724-6091.

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