Sergio Marchionne, CEO of Fiat Chrysler, holds a press conference at the 2015 North American International Auto Show on January 12, 2015 in Detroit.Bill Pugliano/Getty Images
Fiat Chrysler Automobiles NV plans to assemble a Chrysler crossover vehicle at its minivan plant in Windsor, Ont., a move that should keep the busiest vehicle assembly plant in Canada humming on three shifts.
Fiat Chrysler chief executive officer Sergio Marchionne said the Windsor factory will assemble the vehicle if Chrysler decides to go ahead with it.
"It's the natural place," Mr. Marchionne told reporters Monday at the North American International Auto Show in Detroit.
Mr. Marchionne revealed Monday that the auto maker will spend more than $2-billion to develop and engineer the new minivan and retool the Windsor plant to make it.
The company withdrew a request last year for financial assistance from the federal and provincial governments after delays in negotiations with governments and criticism of government help in some political circles.
There had been fears that Fiat Chrysler could reduce the plant to two shifts of workers from three shifts amid a stagnant minivan market and a shift in the company's minivan strategy to offer a single line of the vehicles instead of the current two.
The Windsor minivan plant produced more vehicles last year than any other assembly plant in Canada. The plant employs 5,100 people working on three shifts and it has been running on three shifts since 1994, producing one of the auto maker's most popular and important vehicles.
It will be shut down for three months beginning in February as the auto maker tools up the plant to produce the next generation of minivans, which Mr. Marchionne said he intends to see on dealers' lots during the first quarter of 2016.
But Fiat Chrysler will limit its offerings to just the Chrysler Town & Country model, eliminating the Grand Caravan version it also sells now.
"If they were just going to have a Town & Country or a Caravan as that singular platform there is no way they could hold three shifts. None," said industry analyst Warren Browne, who heads WP Browne Consulting in Northville, Mich.
That's in part because if there's only one model, Fiat Chrysler is likely to retain just 60 per cent to 65 per cent of its existing customers, Mr. Browne said.
"That whole customer base who wants a Dodge and whatever brand character they've developed for a Dodge doesn't automatically roll over to a Chrysler, or vice versa," he noted.
The crossover vehicle that Fiat Chrysler is considering adding to its lineup will likely have three rows of seats like the minivan, industry sources said, but not sliding doors.
Minivan production has topped 300,000 every year at the Windsor plant since 2010.
The plant contributes 0.2 per cent of overall economic activity in Ontario, said Bank of Nova Scotia economist Carlos Gomes.
It supports tens of thousands of supplier jobs.
Chrysler Canada Inc. sold 60,852 Town & Country and Grand Caravan models in 2014, up about 10 per cent from 2013 levels, but down from 90,372 in 2000 during the minivan's heydays.
Americans bought 272,000 Chrysler and Dodge minivans last year, compared with 413,336 in 2000.
The minivan segment held steady last year, capturing 4.5 per cent of the market.