Fact Checks

Is Jeep moving U.S. production to China?

25 Oct, 2012

Claim

On October 26, Mitt Romney told a crowd in Defiance, Ohio, that Chrysler was planning to move Jeep jobs to China.

I saw a story today that one of the great manufacturers in this state Jeep — now owned by the Italians — is thinking of moving all production to China,” Romney said at a rally in Defiance, Ohio, home to a General Motors powertrain plant. “I will fight for every good job in America. I’m going to fight to make sure trade is fair, and if it’s fair America will win.”

On October 28, Mitt Romney’s campaign, released an ad that says Obama “sold Chrysler to Italians who are going to build Jeeps in China”.

Who Will Do More?

Background

In the 2009 Auto Bailouts, Chrysler was bought by Fiat, and Italian carmaker, as part of its bankruptcy. Chrysler had assembly plants in China, but they had been idle since 2009

Bloomberg Story

The story started on October 22, 2012, when Bloomberg published an interview with Mike Manley, Chief Operating officer of Fiat and Chrysler in Asia.

Fiat SpA (F), majority owner of Chrysler Group LLC, plans to return Jeep output to China and may eventually make all of its models in that country, according to the head of both automakers’ operations in the region.

Reaction

The Bloomberg story was picked up by other media, including The Washington Examiner.

In another potential blow for the president’s Ohio reelection campaign, Jeep, the rugged brand President Obama once said symbolized American freedom, is considering giving up on the United States and shifting production to China. It appears that the taxpayer bailed-out Chrysler is looking back and now considering cutting costs by shifting production of all Jeeps to China, which has a strong desire for Jeeps.

In a Bloomberg interview, Jeep’s president said the automaker plans to restore Jeep production in China, suspended in 2009, and is considering making all Jeeps in China. “Fiat SpA, majority owner of Chrysler Group LLC, plans to return Jeep output to China and may eventually make all of its models in that country, according to the head of both automakers’ operations in the region,” reported the business wire service.

Mike Manley, chief operating officer of Fiat and Chrysler in Asia and president of the Jeep brand, told Bloomberg, “We’re reviewing the opportunities within existing capacity” as well as “should we be localizing the entire Jeep portfolio or some of the Jeep portfolio” to China. Chrysler builds Jeep SUV models at plants in Michigan, Illinois and Ohio. Manley said the firm is in talks with China’s Guangzhou Automobile Group Co.

Clarification by Chrysler
On October 25, 2012, Chrysler made a clarifying statement:

There are times when the reading of a newswire report generates storms originated by a biased or predisposed approach. On Oct. 22, 2012, at 11:10 a.m. ET, the Bloomberg News report “Fiat Says Jeep® Output May Return to China as Demand Rises” stated “Chrysler currently builds all Jeep SUV models at plants in Michigan, Illinois and Ohio. Manley (President and CEO of the Jeep brand) referred to adding Jeep production sites rather than shifting output from North America to China.”

Despite clear and accurate reporting, the take has given birth to a number of stories making readers believe that Chrysler plans to shift all Jeep production to China from North America, and therefore idle assembly lines and U.S. workforce. It is a leap that would be difficult even for professional circus acrobats.

Let’s set the record straight: ”Jeep has no intention of shifting production of its Jeep models out of North America to China.” It’s simply reviewing the opportunities to return Jeep output to China for the world’s largest auto market. U.S. Jeep assembly lines will continue to stay in operation. A careful and unbiased reading of the Bloomberg take would have saved unnecessary fantasies and extravagant comments.

Which is a reference to the fifth paragraph of the original Bloomberg article:

Chrysler currently builds all Jeep SUV models at plants in Michigan, Illinois and Ohio. Manley referred to adding Jeep production sites rather than shifting output from North America to China.

Romney campaign response
In response, a Romney spokesman explained: “The larger point that the governor made is that rather than creating jobs here, the foreign owner, handpicked by President Obama, is planning to add jobs overseas.”

However, Chrysler, has added 11,000 jobs in the U.S. since 2009.

Chrysler considering moving Jeep production to Italy

On October 29, 2012, the National Legal and Policy Center noted that the CEO of Fiat, Sergio Marchionne said in another  interview that:

To counter the severe slump in European sales, ”’Marchionne is considering building Chrysler models in Italy, including Jeeps, for export to North America.”’ The Italian government is evaluating tax rebates on export goods to help Fiat. Marchionne may announce details of his plan as soon as Oct. 30, the people said.

NLPC editorializes that “The evidence is clear that Fiat is looking at ways to move production of vehicles from the US to elsewhere, whether it be China or Italy, costing American jobs. This is becoming indisputable, despite outcries from certain parties to the contrary. Mitt Romney has rightfully criticized the Obama Administration for handing over Chrysler to the Italians and now leaving the fate of American workers in the hands of Fiat management. Fiat is not a healthy company and the auto industry is in as great a risk as ever. The insistence that all is well by those with political motivations does not mask the danger. More jobs are at risk of being lost and more taxpayer money may be lost as well.

An article by Bloomberg on October 30, contained the following information:

Marchionne, 60, has said Jeep has the best opportunity among all of Chrysler’s brands to succeed globally. Fiat, which is working on a production plan for Europe to account for the region’s slumping demand, said today that it will build a small Jeep in Italy for export beginning in 2014. The Jeep, which wasn’t identified by name, is a new model for Europe ”’and the U.S.”’ that isn’t currently in production, according to a Fiat presentation.

Politifact names this issue their “Lie of the Year 

On Dec 12, 2012, Politifact named this issue as their “Lie of the Year”

It was a lie told in the critical state of Ohio in the final days of a close campaign — that Jeep was moving its U.S. production to China. It originated with a conservative blogger, who twisted an accurate news story into a falsehood. Then it picked up steam when the Drudge Report ran with it. Even though Jeep’s parent company gave a quick and clear denial, Mitt Romney repeated it and his campaign turned it into a TV ad.

And they stood by the claim, even as the media and the public expressed collective outrage against something so obviously false. People often say that politicians don’t pay a price for deception, but this time was different: A flood of negative press coverage rained down on the Romney campaign, and he failed to turn the tide in Ohio, the most important state in the presidential election.

Jeep says it will move production to China

On Jan 17, 2013 Reuters reported that:

Fiat (FIA.MI) and its U.S. unit Chrysler expect to roll out at least 100,000 Jeeps in China when production starts in 2014 as they seek to catch up with rivals in the world’s biggest car market. …

“We expect production of around 100,000 Jeeps per year which is expandable to 200,000,” [Chrysler CEO Sergio] Marchionne, who is also CEO of Chrysler, said on the sidelines of a conference, adding production could start in 18 months.

The Weekly Standard writes:

If we’re really going to be scrupulous about who we trust, the fact that the “Lie of the Year” is nothing more than sophistry aimed at tearing down a Republican presidential candidate says volumes about PolitiFact’s credibility.

Conclusion

1. The initial article by Bloomberg News was easy to misread

2. The Romney campaign ad is correct: Chrysler was sold to Italians who will build Jeeps in China

3. Mitt Romney was wrong to say that all Jeep production will move to China, however:

4. In October CEO of Fiat has said that the company is considering moving Jeep production to Italy and that those Jeeps would be sold back to America.

5. Chrysler has added 11,000 jobs in the U.S. since 2009.

6. In January 2013 Chrysler said it will produce 100,000 Jeeps per year in China

Result

TRUE

Related Fact Checks

Washington Post – 4 Pinocchios for Mitt Romney’s misleading ad on Chrysler and China.

Four “pinocchios” rating

Politifact – Mitt Romney says Barack Obama “sold Chrysler to Italians who are going to build Jeeps in China” at the cost of American jobs.

“Pants-on-fire” rating. Politifact later called this their “Lie of the Year”

Breitbart Fact Check: Washington Post Calls Romney Jeep Ad “Correct”

Weekly Standard – Whoops! Politifact’s “Lie of the Year” turns out to be true

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