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Chrysler Plans to Build Fiat in Mexico

By Jason Farago,  Newser Staff

Posted Aug 17, 2009 6:52 AM CDT
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(Newser) – Chrysler is planning to produce a Fiat-branded subcompact car at a plant in Mexico, insiders tell the Wall Street Journal. The move may anger two key shareholders of the restructured automaker—the US government and the United Auto Workers. Workers at the Toluca, Mexico, plant are represented by a Mexican union, not the UAW. "There is going to be political fall-out on anything in this kind of environment related to jobs," says one analyst.

Last spring GM, which like Chrysler received billions in taxpayer aid before restructuring, faced criticism for plans to build a car in China—and eventually relented, slating it for Michigan instead. But the American market for the Fiat 500, which gets about 40 mpg, may not be large enough to merit a US plant. Chrysler thinks it can export the car to Central and South America from the Mexican plant, but believes it would make little to no profit if it were assembled stateside.

Italian Premier Silvio Berlusconi, right, whispers to Fiat Group CEO Sergio Marchionne prior to a press conference.
Italian Premier Silvio Berlusconi, right, whispers to Fiat Group CEO Sergio Marchionne prior to a press conference.   (AP Photo/Pier Paolo Cito)
Chrysler is planning to build the Fiat 500, a subcompact that gets 40 miles to the gallon, at a Mexican plant.
Chrysler is planning to build the Fiat 500, a subcompact that gets 40 miles to the gallon, at a Mexican plant.   (AP Photo/Joerg Sarbach, File)
Jim Press, president and vice chairman of Chrysler, steps out of a Fiat 500 at the New York International Auto Show Wednesday, April 8, 2009, in New York.
Jim Press, president and vice chairman of Chrysler, steps out of a Fiat 500 at the New York International Auto Show Wednesday, April 8, 2009, in New York.   (AP Photo/Mark Lennihan)
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COMMENTS
Showing 3 of 10 comments
cognitivefilter
Aug 18, 2009 5:51 AM CDT
point of interest: 95% of the cars in brazil are made in brazil. fiat is huge down there. most of their cars also work on flexfuel, which means that the engine can run on any type of oil: regular, diesel, ethanol, veggie oil.....it's really remarkable.
JonmarkP
Aug 17, 2009 12:19 PM CDT
They're locating the factory in Mexico just when "buy American" is taking root? The only way to support US auto manufacturing is to buy Toyotas, Hondas and Nissans. That's pathetic. We should be outsourcing the management, not the factories.
Yourself
Aug 17, 2009 6:32 AM CDT
@jonmark - there's a very small market for cars that are the size of the one in the 3rd pic. don't get me wrong, it's a growing market as people start to realize that driving a pickup truck all the time isn't profitable unless it's for work purposes. None the less, the market is so slim here that they're being partially realistic as to where they should be building them. Personally i'd love to see them built here and create new jobs here, but i can see their reasoning for a central american plant.
Money • World

 
Chrysler • Mexico • automaker • auto industry • subcompact • Fiat • auto bailout

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