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Fiat to fill in the blanks for Chrysler

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Fiat to fill in the blanks for Chrysler

BY MARK PHELAN

FREE PRESS COLUMNIST

Chrysler's chances of ending its sales decline and returning to profitability should become clearer Wednesday, when Fiat is to lay out a five-year business plan.

The strategy for the Fiat, Alfa Romeo and Lancia brands is expected to reveal new details about the vehicles Chrysler's North American factories will build. Also expected are details of Alfa's return to the U.S. market, plus future product lines for Chrysler, Dodge, Jeep and the new Ram commercial-vehicle brand.

Decisions that Chrysler and Fiat CEO Sergio Marchionne are to announce Wednesday in Turin, Italy, may include:

• The Chrysler and Lancia model lines will become one global upscale brand.

• Chrysler production of several vehicles for the sporty Alfa Romeo brand.

• Chrysler's North American assembly plants will produce up to 400,000 vehicles a year for Fiat's European brands.

• Whether the Agnelli family, which controls Fiat and Chrysler, plans to spin off the company's auto operations in a stock sale.

Key is intergrating engineering, sales, production

Marchionne's plan to more than double Chrysler's annual sales from 1.3 million last year to 2.8 million by 2013 relies on integrating Fiat and Chrysler engineering, sales and production around the world.

"It's a truly symbiotic relationship," said Jim Hall, managing director of consultant 2953 Analytics in Birmingham. "Fiat is providing the seed for a lot of Chrysler Group vehicles, and a lot of Chrysler vehicles will help Fiat around the world."

As Chrysler and Fiat operations become intertwined inextricably, plans for the Fiat, Lancia and Alfa Romeo brands will affect jobs from Chrysler's Auburn Hills headquarters to factories in Michigan, Ohio, Indiana, Illinois, Ontario and Mexico, as well as dealerships across the country.

Chrysler is to announce financial results for the latter part of 2009 and the first quarter of 2010 in a separate statement Wednesday, but it is unclear how much detail the company will provide.

Chrysler's chances of earning a profit, repaying taxpayer loans and becoming a stable employer depend on the success of its engineering and production work with Fiat. Fiat owns 20% of Chrysler, but it controls the company through its agreement to provide technology for new vehicles Chrysler needs.

The presentation in Turin, Italy, where Fiat has its headquarters, will fill in some blanks left in Chrysler's November presentation of its strategy though 2014.

Key parts of Chrysler's strategy are dependent on plans for the Fiat, Alfa and Lancia brands.

Chrysler is to have worldwide responsibility for developing pickups, minivans, large crossovers, midsize and large cars for itself and Fiat. Fiat is to handle the engineering of compact, subcompact and smaller cars and crossovers.

From Chrysler's point of view, that probably means the following developments:

• Chrysler's Brampton, Ontario, assembly plant will produce a luxury car for Alfa Romeo alongside the next generation Chrysler 300 and Dodge Charger.

• The design and engineering of Chrysler and Lancia vehicles will converge to form a single global premium brand. Chrysler will export midsize and larger cars -- including the next 300 and the replacement for the Sebring sedan and convertible -- for sale alongside Lancias in Europe and around the world.

• Midsize and larger Dodge vehicles will be sold as Fiats in Europe.

• Chrysler factories in North America will build 400,000 or more vehicles for sale by Fiat brands annually. Chrysler already plans to produce as many as 130,000 Fiat 500s in Toluca, Mexico.

• Fiat's European plants will build one or more small vehicles Chrysler will sell in North America. • A Chrysler plant not yet identified will produce a new Alfa Romeo sport sedan and sporty station wagon.

• A Chrysler plant will produce a crossover for Alfa Romeo, possibly on the same Fiat-based platform as the replacement for the current Jeep Liberty SUV.

• A Fiat plant just outside Turin will build a specialty model based on a Chrysler platform for sale by Chrysler and Fiat brands.

• Chrysler will export the new 2011 Jeep Grand Cherokee from its Jefferson Avenue assembly plant in Detroit to Europe. Foreign production of that and other new Jeeps will be key to the growth in China, Russia and possibly South America.

link:

http://www.freep.com/apps/pbcs.dll/article?AID=/20100419/COL14/4190354/1331/Business01/Fiat-to-fill-in-the-blanks-for-Chrysler-&template=fullarticle

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