Friday, August 24, 2007

Local assembly workers watching new Chrysler minivan closely




ST. LOUIS POST-DISPATCH
08/24/2007
New Chrysler minivan
Jose Farah checks out a display model of the new 2008 Dodge Caravan at Glendale Chrysler Jeep. The new minivans which will be made at the Chrysler plant in Fenton, Mo. will hit showrooms this month.

Good minivans are more about function than fashion. So rather than impress consumers with a radical new look, Chrysler's 2008 Town & Country and Dodge Grand Caravan will try to turn heads in its new vehicle. Or, rather, swivel heads.

The minivans, which began trickling into local showrooms this month, feature a new grille reminiscent of the aggressive design from Dodge's Ram pickup and Nitro cross-over. Meanwhile, the interior has a 360-degree swivel to its second row of seats, while the third row folds and flips to face either the inside or out the minivan's rear hatch.

New features or not, the vans have a special interest locally. Chrysler's south plant in Fenton will begin assembling them in early September. The first models rolled off an assembly line Tuesday in Windsor, Ontario.

The Fenton minivan plant has been shut since mid-May to retool for the new model. Chrysler has said more than 80 percent of the equipment in the area of trim and chassis assembly will be replaced. Additionally, the paint and body shops will be overhauled.

he Fenton line also will be capable of assembling up to four different vehicle styles on the same frame without shutting for major retooling.

Only the Town & Country and Grand Caravan are slated for production at the plant, but that includes a right-hand drive version of the minivans to be sold in Japan.

For consumers, the renovated Chrysler minivan not only has a new style, but a lower price. The base model of the Dodge Grand Caravan will have a manufacturer's suggested retail price of $22,470, down $1,950 from the 2007 model. Meanwhile, the Chrysler Town & Country's base model will carry a suggested price of $23,190, or $3,585 less than the current model.

But for the 2,847 employees at the Fenton plant, the new van symbolizes hope that Chrysler can recapture the strength in minivans that some analysts say is fading. Uncertainty about the plant's employees rose when Chrysler's former parent company, DaimlerChrysler AG, announced in February that it would lay off 1,935 workers in coming years at the South and adjacent North plant, where Chrysler assembles the Dodge Ram. The company's new owner, Cerberus Capital Management, has said it will not change that plan.

So far, analysts haven't been blown away by the new minivan, but then, that's not necessary, said Michelle Krebs, senior editor of Edmunds AutoObserver.com, a site that publishes commentary and analyses of the industry.

"They're being criticized by some for not stretching very far in the design," said Krebs, who added that she thought the van was attractive. "But most minivan buyers don't care about the design. They care about the function."

Chrysler Brand Director David Rooney said minivan buyers look for the difference between style and design.

"They're a little different," Rooney said. "Design works. Great design has function."

Great function, Rooney said, is what has helped Chrysler capture 38 percent of the minivan market. Chrysler's next closest competitor is Honda's Odyssey, which grabs 16 percent of the market.

Consumers have consistently bought about 1.1 million minivans annually since 1993. But minivans missed that mark in 2006, and it appears the class won't recover this year, Krebs said. She added, though, that as a market leader, Chrysler's redesigned vans could boost attention for all minivan models.

That market is increasingly dominated by imports. In 2008, Chrysler will be the only domestic maker of minivans. Ford cut its Freestar model last year and turned to Freestyle, a cross-utility vehicle that many see as a minivan sans sliding doors. Meanwhile, the 2007 model year will be the last gasp for GM's Chevy Uplander, Pontiac Montana and Buick Terraza.

Foreign makers are showing no signs of retreat, a fact that Chrysler has accepted. In fact, the automaker helped Volkswagen design a minivan that will enter showrooms in August 2008.

Volkswagen's vans will be made at Chrysler's Windsor plant, according to industry analysts. Manufacturing efficiency and cost reductions have been key drivers in the Chrysler's minivan efforts. In Fenton, newly installed robots have replaced some assembly workers, driving down production costs per vehicle. Chrysler has reduced the number of minivan option packages it offers to about 1,300 from more than 11,000. At the same time, the automaker offers more standard features in its base model, such as its new Swivel-'n-Go 360-degree seats.

In turn, the company has lowered prices not only on base models, but on more well-equipped models that include such options as Sirius satellite radio and television.

The latter options may prove important for sales. Only a quarter of consumers purchase the base model of any vehicle, said Catherine Madden, senior automotive analyst for market research firm Global Insight.

Madden said manufacturers get more attention from consumers for dropping prices among models with more features.

Chrysler managed to cut prices there, too, dropping its top tier Grand Caravan to $27,535 from $28,505 and the Town & Country to $36,400 from $37,335.

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