National Post (National Edition)
CANADA ‘VERY IMPORTANT’ TO FIAT CHRYSLER, CEO SAYS.
CEO promises to add capacity somewhere
• Fiat Chrysler Automobiles plans to add production capacity, chief executive officer Michael Manley said Monday, an expansion that’s in contrast with planned cuts by its two major U.S. rivals.
Manley, who was appointed CEO in July after his late predecessor Serio Marchionne stepped down for health reasons, wouldn’t reveal where FCA plans to expand production, but said an announcement will be made within weeks. Extra capacity is needed to build two new Jeep models, he said, noting the brand posted record sales last year.
FCA’S growth comes after General Motors Co. and Ford Motor Co. announced restructurings in the past two months. In November, GM revealed plans to close eight plants worldwide — including the century-old plant in Oshawa, Ont. Last week, Ford announced plans to cut production in Europe.
The cuts at GM, in particular, caused anxiety for the Canadian auto sector, which is grappling with a long-term decline in production as manufacturing shifts to Mexico.
But in a wide-ranging roundtable discussion with reporters on Monday, Manley said FCA’S two Canadian assembly plants remain “very important” to the automaker.
Nearly 25 per cent of the cars made in Canada are built by FCA. It manufactures the 2017 Chrysler Pacifica, Chrysler Pacifica Hybrid and Dodge Grand Caravan at its plant in Windsor, Ont., which opened in 1928 and employs 6,100 workers. FCA employs an additional 3,500 people at its Brampton, Ont. plant, where it makes the Chrysler 300, Dodge Charger and Dodge Challenger.
While Manley wouldn’t make any specific announcements on Canada’s future role in FCA’S production mix — it operates 159 plants around the world — he described the made-in-canada brands as “very important,” particularly the Dodge muscle cars.
“They’ve done well for Dodge this year even though that segment has been under pressure and they’re part of the Dodge DNA,” Manley said.
As for the Windsor plant, the Pacifica has been important in developing partnerships with other industry players, he said, pointing to the deal with Alphabet’s self-driving unit Waymo. Last May, the companies announced that Waymo ordered 62,000 minivans for its fleet.
“Remember, it was only in 2016 we put $1 billion into that plant,” Manley said. “The results that we get with Pacifica show us the right thing.”
While Manley said there is always “fat that can be trimmed” in any business, he said FCA did its major manufacturing realignment three years ago.
“Some of the very large restructuring you have seen, we have no need to do that to that extent,” he said. Rather than a “big bang,” he said FCA’S regions have mandates for ongoing improvements to efficiency.
“From the data that’s available, I think we’re running with the right number of people for the job that they’re doing and the job that we need them to do,” he said.
Manley also addressed uncertainty surrounding trade relationships in response to various questions about steel tariffs, the U.s.-china talks and North American trade negotiations.
“Without that certainty, it either slows your investments or you try to invest in a place that does give you certainty,” he said.
When it comes to the new United States-mexico-canada Agreement, he said the deal works for the industry by giving it the certainty it needs.
“Hopefully it will get ratified early this year. As I said, that is important, not just for us, but anyone who is investing significant capital that you don’t get returns on for a period of time.”
On a personal note, Manley acknowledged the challenge of coming into the CEO role following the sudden illness, and subsequent death, of his predecessor, Italian-canadian Marchionne. There were succession plans in place for Manley, former head of the Jeep and Ram brands, to take charge, but the change was a shock.
“You think you know a lot about a company and a business and the job that you do, which is true, but you discover an awful lot more when a change like that happens,” he said.
He credited Marchionne for an incredible business education, adding Marchionne “effectively saved” the company when he took charge in 2009. One lesson, he said, was that a leader has an obligation, regardless of the circumstances, to show leadership and make the best of it.