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So, Is Jeep Really Moving To China, Or What?

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Update: See below

Last week, Bloomberg News ran a story with this headline: "Fiat Says Jeep Output May Return to China as Demand Rises".

There are three ways you could look at that. 

1. You could cock your head to the side like Nipper the RCA dog and wonder what the heck it means.

2. You could assume that the writer simply chose a clumsy headline for a story that should've been titled something like, "Jeep May Reopen Factories In China".

3. You could assume that Chrysler's Italian overlords are moving the design, research, and manufacturing facilities of one of America's most popular automotive brands to China (for cheap labor, less regulation, more incentives, take your pick), thus hastening the arrival of the End Times.

Most readers probably chose option #1 or #2. However, a handful of politicians and pundits selected option #3 without bothering to read the article and suss out the facts. This is how rumors get started.

As we pointed out last week at Motor Authority, the Bloomberg story referred to the production of Jeep vehicles for the Chinese auto market: "Today, all Jeep models are produced in the United States, at assembly lines in Michigan, Illinois and Ohio. In the pre-Fiat days, however, some Jeep models destined for China were built in in Chinese plants."

That is exactly what the author of the Bloomberg article with the poorly worded headline was going on about. To streamline production during the Great Recession, Chrysler CEO Sergio Marchionne had Jeeps for the Chinese market built in the U.S. To meet growing demand, however, Marchionne is now in talks with Guangzhou Automobile Group about the possibility of making some -- or perhaps all -- Chinese-bound Jeeps in China itself.

And for those who still find fault with that, complaining that Marchionne is creating jobs overseas rather than in America, we should point out that the automaker is on a hiring roll in the U.S. In fact, just last week, Chrysler added 1,100 workers at a Detroit factory to help meet strong demand for the Jeep Grand Cherokee.

None of which is meant to excuse the Bloomberg article from being vague. The author could've clarified things early on, but instead chose to wait until the fifth paragraph to explain that the Chrysler/Guangzhou partnership would result in "adding Jeep production sites rather than shifting output from North America to China". So in fairness, we can understand how pundits might get confused.

Not that pundits are always interested in fairness, of course.

Update: To correct the multiple misreadings of the Bloomberg story currently floating around the blogosphere and on the airwaves, Marchionne has issued a statement on the matter:


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Comments (7)
  1. If Jeep is built in China, Fiat can keep it. How many American would by a car made in China. So far they have killed our pet's, poison our children with lead in toy's, and have given us toxic drywall.
     
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  2. Please read the article: Jeep is not moving to China. Jeep may build some Jeep vehicles for Chinese consumers in China. Big difference. Jeeps for U.S. consumers will continue to be made in North America.
     
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  3. I remember when Rheem ( owned by the Japanese )said they were only building a plant in Mexico to build their builder grade and differently branded heat pumps. They said the same thing. When finished they closed their Milledgeville, GA plant. I would not bet on that Richard.
     
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  4. Well, I agree that we can never be entirely sure about these things. But see my comment below: Jeep is basically doing what every other automaker on the planet does to facilitate distribution and accommodate widely varying styles/standards. It's essentially the same as Hyundai, Kia, Mercedes, Volkswagen and others building plants in the U.S. That's not to say we shouldn't keep an eye on it, only that it's not especially unusual. (Also, I think Jeep would face real problems with U.S. customer loyalty if it moved production to China. But that's an article for another day.)
     
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  5. Another case of "depends on the definition of IS". These jobs are not being created in the US of A, so why would you not admit that creating them in China is effectively outsourcing by a company that we taxpayers bailed out with our hard earned tax money.
     
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  6. If we want to stick with that narrow view of outsourcing, we're going to have to start pointing a lot more fingers. Ford and GM, for example, build huge numbers of cars in foreign countries for ease of distribution. And other companies like Toyota, Honda, Kia, Hyundai, Mercedes-Benz, and BMW have plants in the U.S. to do the same thing.

    So while this is technically a form of outsourcing, I would argue that it's a far cry from Apple, which conducts nearly all of its major manufacturing in one foreign plant, then has products shipped back to the U.S. What Chrysler and other automakers do (i.e. building products in multiple locations for ease of distribution and accommodating widely varying styles/standards) seems a very different thing.
     
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  7. What post on the Obama campaign team does Richard Read hold? His writing is absolutely shameful in it attempt to be biased for Obama.
     
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