So this could mean less jobs in the USA.
Chrysler Group LLC said a plan announced Friday in Italy whereby the automaker would begin producing Jeep models at an Italian plant.
If Chrysler enacts the plan, it would represent the first major impact that Chrysler has had on Fiat SpA's Italian operations since Fiat took control of Chrysler operations last year. Fiat owns a 20 percent stake in the U.S. automaker.
Sergio Marchionne, chief executive of Chrysler and Fiat, said the two automakers intend to form a joint venture that would build Jeep and Alfa Romeo vehicles at the Mirafiori plant in Turin, Italy.
The plan includes annual production of 250,000 to 280,000 vehicles, which will be produced on a new basic vehicle framework to be shared by Chrysler and Fiat. It is unknown how many of the vehicles would be Jeeps and how many Alfa Romeos.
The platform will be used for "C-segment" and "D-segment" cars and sport utility vehicles, and is the same one that will be used for the next-generation Jeep Liberty in the United States.
Fiat says the plant would start producing Jeep and Alfa Romeo models by late 2012.
Chrysler spokesman Gualberto Ranieri said the plan will increase Jeep production, and is not "expected" to take away business from Jeep's Ohio operations. "This announcement is not going to penalize Toledo," he said.
But vehicles made at the Mirafiori plant "will be exported to North America" as well as sold in Europe, according to Fiat's statement.
Joseph Phillippi, an industry analyst with AutoTrends Consulting in Short Hills, N.J., believes Chrysler will continue to keep Jeep jobs and production in Toledo to maintain positive union and political relationships.
Local UAW officials could not be reached for comment.
The Jeep vehicles produced in Italy likely would be smaller than the utility vehicles made in Toledo, he said. "I seriously doubt they're talking about building anything that's a true competitor that would take jobs away from Toledo," Mr. Phillippi said.
The companies plan to invest a total of about $1.3 billion in the Mirafiori plant, which will be split according to the proportion of vehicles made for each brand.
Mr. Ranieri said the automakers are investing in Italy in an effort to balance imports and exports between Chrysler and Fiat.
"We are talking about an international partnership," Mr. Ranieri said. "You have to balance the left and the right. We have two hands. We don't have just one hand."
Mr. Marchionne proposed the Italian plant investment during ongoing talks with Mirafiori unions in which the company is seeking more flexible work rules.
Mirafiori produces Fiat-branded Punto, Idea, and Multipla vehicles, the Lanca Musa, and the Alfa Romeo Mito. The plant employs 5,800 workers, a number that could increase.
An Italian-made Jeep would mark the third time the iconic sport utility has been produced in Europe. From 1994 to April, 2010, Jeep Grand Cherokees were built in Graz, Austria, by Magna Steyr, the Austrian unit of Canada's automotive supplier Magna International Inc. From 2006 to April, 2010, Magna Steyr also made Jeep Commander vehicles.