Chrysler Lays Off Workers at Fiat 500 Engine Plant

According to an official with the United Auto Workers Union, slow North American sales of the Fiat 500 has forced Chrysler Group to lay off more than 100 hourly workers.

The layoffs occurred at the automakers Global Engine Manufacturing Alliance Plant, located in Dundee, Michigan where the 500’s 1.4-liter FIRE engine is made. The plant’s UAW chairman, Tom Zimmerman, said the layoffs were made at the beginning of the month. He said he does not know when the workers will be recalled.

Chrysler spokeswoman Jodi Tinson disputes Zimmerman’s claim that 100 workers have been affected. She claims the company is “moderating its schedule to adjust for the current bank of engines” and that approximately 30 hourly workers have been laid off and that an additional 35 have been “redeployed” to other positions within the plant.

Chrysler internal documents dated November 1 stated that the company had a 184-day supply of Fiat 500s. Tinson, however, claims that there was a 140-day supply of 500s at the end of October. She said she is “very pleased with the progress we are making with the North American launch of the Fiat brand.”

Chrysler’s initial sales figures show that the 500 has sold well in California and the Southeast since arriving dealerships last March. The model has not been as well-received in Midwestern markets. There are now 130 stand-alone Fiat dealerships across the U.S.

Prior to the 500’s U.S. launch, Fiat-Chrysler CEO Sergio Marchionne was predicting annual sales in North America to reach 50,000 units this year. As of the end of October, however, only 15,826 units had been sold.

Chrysler is hoping to boost sales with the North American launch of the Fiat 500 Abarth later this week. The Abarth is a high-performance, two-door model with a 160-hp 1.4-liter engine.

The launch of the 500 subcompact last March marked Fiat’s return to the U.S. market after nearly 30 years. Chrysler and Fiat had hoped to launch the 500 last December but repeated delays, caused by logistical problems and severe weather pushed the launch date back three months. The vehicles are being manufactured at Fiat’s manufacturing facilities in Toluca, Mexico and final assembly is being completed at Chrysler facilities in the U.S.

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