May 14 (Bloomberg) -- Chrysler Group LLC has hired 204 workers at a new factory in Tipton, Indiana, to make transmissions for its popular Jeep Cherokee sport-utility vehicle and Chrysler 200 sedan, about a quarter of the total hires planned for the facility.
The factory will employ 600 workers by the end of the year and 850 a year later, the company said. The automaker, fully acquired by Fiat SpA in January, spent $162 million to outfit the 782,000 square-foot (72,650 square meters) facility to build nine-speed transmissions, which improve highway fuel efficiency. The company is using the parts in its new Cherokee and 200.
At full capacity, the plant will be able to ship about 800,000 transmissions annually to assembly plants in Toledo, Ohio, and Sterling Heights, Michigan, as well as Italy, Turkey, Brazil and China, Chrysler said in a statement yesterday. Production at the plant started last month, said Jodi Tinson, a spokeswoman.
Executives last week laid out a five-year business plan that calls for 55 billion euros ($75 billion) in investments to transform Jeep, Alfa Romeo and Maserati into global brands. The initiative also calls for the Chrysler brand to more than double deliveries to 800,000 by 2018. The two automakers plan to be fully integrated by the end of the year as Fiat Chrysler Automobiles NV with a primary listing in New York and a headquarters in London.
Sergio Marchionne, chief executive officer of both Turin, Italy-based Fiat and Auburn Hills, Michigan-based Chrysler, wants to make Fiat Chrysler big enough to compete with General Motors Co., Volkswagen AG and Toyota Motor Corp. The company is currently the seventh-largest automaker, Marchionne has said. His plan is to boost sales to 7 million by 2018, enough to vault it at least one spot higher in the rankings, he said last week.
Investors expressed their skepticism the next day by selling Fiat shares, leading to the biggest drop in more than 2 1/2 years on May 7.
“We had a phenomenal run in 2014,” he said to reporters at the Indiana plant. “People are taking money off the table and I’m sure there are some concerns about our ability to hit our goals. But I think there is some part of the market that’s going to be doubtful and I think we have to wait until the dust settles and people will take positions.”
The 2018 targets will benefit the company whether or not they are all reached, he said yesterday.
“Even if I miss it by 10 percent, from where I am today, it’s like the midget and the Jolly Green Giant,” Marchionne said, referring to a character used to advertise frozen vegetables produced by General Mills Inc. “Trying to get to 7 million cars is going to be a composite of a number of misses and a number of over achievements.
‘‘We’re never going to get all the numbers right,’’ he said. ‘‘I guarantee you. The issue is whether I get to 7 million cars and I make the money that goes with it.’’
Marchionne said the company may have to add jobs and expand Jeep production in the U.S. to meet the 2018 targets.
‘‘There’s no doubt that we’re going to have a headcount increase in North America, because I need to increase the production,” he said. “Where we do it physically and how we use the existing facilities is another answer.”
Jeep brand sales rose 52 percent to 59,754 in April, helped by the Cherokee, which already rivals Jeep’s volume models, the Wrangler and Grand Cherokee in less than a year on the market. Chrysler has increased sales in the U.S. for 49 consecutive months.
The 200 family sedan, Chrysler’s entry in the largest car segment in the U.S. market, began shipping to dealers earlier this month.
(An earlier version of this story was corrected because Jeep sales were described through April instead for that month alone.)