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Chrysler chief to Romney campaign: Jeep not moving to China

Chrysler CEO Sergio Marchionne

Brett Gundlock/The Globe and Mail

The U.S. election is almost certain to come down to who captures Ohio, and a memo by Chrysler Group LLC chief executive officer Sergio Marchionne could help give Barack Obama the edge he needs.

Mr. Marchionne, who led the acquisition of Chrysler by Fiat SpA during the early days of Mr. Obama's presidency in 2009 – which at the time was the last hope for survival for the No. 3 Detroit auto maker – was dragged into the campaign Tuesday to respond to misleading advertisements and comments by Republican presidential candidate Mitt Romney.

"Jeep is one of our truly global brands with uniquely American roots. This will never change," Mr. Marchionne wrote in a memo to employees in response to Mr. Romney's comment that Chrysler is planning to shift Jeep production to China. "I feel obliged to unambiguously restate our position: Jeep production will not be moved from the United States to China."

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This is a critical issue in Toledo, Ohio, which is the manufacturing home of Jeep and the factory where 1,900 workers turn out Jeep Wrangler models. In a suburb of Toledo, another 850 Chrysler workers make parts for Jeeps. The auto maker is spending $500-million (U.S.) to retool the Toledo plant to build a new vehicle to replace the Jeep Liberty and will increase employment by more than 1,000 people by 2013.

At another Jeep plant in Detroit, Mr. Marchionne said Chrysler has added 2,000 jobs since 2009.

Mr. Obama's bailout of Chrysler and General Motors Co. – with help from the Canadian and Ontario governments – is one of the centrepieces of his re-election campaign and a problem for Mr. Romney, who argued four years ago that the auto industry should be left to restructure on its own without government help.

That stance has hurt Mr. Romney in Michigan, his home state. He's the son of George Romney, who was president of American Motors Corp. AMC owned the Jeep brand before Chrysler bought AMC in 1987. Polls show Mr. Obama leading Mr. Romney in Michigan by four percentage points. In neighbouring Ohio, polls show a two-point edge for Mr. Obama.

Mr. Marchionne did not mention either candidate in his memo or the government bailout that gave Fiat management control of Chrysler. The U.S., Canadian and Ontario governments also took ownership stakes in Chrysler and GM as part of the bailout. They have sold their stakes in Chrysler, but have kept their shares in GM, which also has a big presence in Ohio, with an assembly plant in Lordstown in the eastern end of the state.

Jeeps were built in China from 1984 to 2009 at a company called Beijing Jeep. Chrysler recently announced that it will begin assembling the vehicles in China again, but for the Chinese market. To jump from that plan to a suggestion that Chrysler will shift all Jeep production to China "is a leap that would be difficult even for professional circus acrobats," Chrysler spokesman Gualberto Ranieri said in a blog post.

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