There are going to be three additional shifts at its plants in Detroit, Sterling Heights and in Belvidere, Illinois. Each shift will add around 1,000 workers. Chrysler has benefited from a rising domestic and global demand for some of its models such as the Jeep Grand Cherokee. Chrysler's factories in Illinois and Michigan employ around 7,000 hourly workers.
The Detroit plant builds Chrysler's ever-popular Jeep Grand Cherokee, while the Sterling Heights plant assembles the Chrysler 200 sedan. The Belvidere plant makes Dodge Caliber, Jeep Compass and Patriot SUVs. The United Auto Workers, the main auto union, is also negotiating with Chrysler, Ford and GM to replace the hiring and pay agreements that expire in September. But unlike the previous negotiations, this time UAW is not threatening plant closures.
Chrysler has recently come under criticism that its gas-guzzling models will ensure that the company will once again lose money and need to be bailed out by the taxpayers. But Chrysler CEO Sergio Marchinonne has said that the company is improving the fuel efficiency of its models. He has said that the company's lineup has improved its fuel efficiency by 40%.
But with gas prices rising nationwide, and now hitting $4 a gallon in several areas, the fact remains that Chrysler does not have a highly fuel-efficient small car. Most auto experts say that consumers still do not think of Chrysler when they are looking for a fuel-efficient vehicle.
Chrysler for its part has in a short time redesigned 16 of its models in just under a year. It has succeeded in raising its global sales by 18% in the first three months of 2011. Chrysler is also expecting to make a profit of $200-$500 million. In 2010, the company had a loss of $652-million.
Part of Chrysler's strategy to increase its profit margin is to cut down its dependence of fleet sales. Fleet sales are generally less profitable than retail sales and also hurt the resale values. Chrysler is also cutting down on the incentives that it is offering to its customers. Previously it had among the biggest incentives among the auto industry.
Now the average incentives offered by Chrysler have dropped on average of $426 per car and stand at $3,111. This has resulted in the average price of the car increasing by around $1,000. Chrysler's total sales increased by 22.5% in April, compared to the industry standard of 19.5%. Chrysler now has a U.S. market share of 9.6%.
