By on November 16, 2015


Detroit automakers may be betting high-profit SUVs and trucks are a better fit for their domestic plants as those automakers shift production away from cars to make room for larger, high-margin vehicles.

Ford and Fiat Chrysler Automobiles will largely shift production of their cars to Mexico and bring more trucks and SUVs to North American facilities, according to their contracts with the United Auto Workers,  Automotive News reported.

The report consolidates production planning schedules included in UAW contracts with domestic automakers, which shows automakers’ plans to move some of their cars to Mexico or overseas. Of the Big Three, General Motors will sell the most domestically produced cars in North America, including the Malibu, Impala, Sonic, Bolt and Volt, although the small-car plant recently announced a slowing production schedule. Ford will still produce the Mustang and Fusion at its Flat Rock plant in Michigan. 

The shift represents a significant departure for the automakers who moved production of cars into the U.S. after 2000 to insulate themselves from massive SUV slowdowns due to rising fuel costs.

According to Ford’s contract with the UAW, production of the slow-selling C-Max hybrid and Focus will head to Mexico in favor of a new truck (likely Ranger) and SUV (likely Bronco) at its Wayne, Michigan facility. Union workers at that plant voted overwhelmingly in favor of the four-year contract with the automaker, in part, because of that plant’s gain of a high-margin truck and SUV.

Ford’s chief U.S. sales analyst Erich Merkle told Automotive News the automaker’s improved SUVs and worldwide sales could offset any sudden rise in gasoline costs in North America, which burned the automakers last time around when they bet heavy on SUV sales.

“The SUV has evolved dramatically over the last 15 years, and that’s really helped to keep it at the forefront,” Merkle told Automotive News. “SUVs are actually a growing segment not just in the U.S. but when you look to Europe and parts of Asia and China. It’s a worldwide growth story.”

The automakers have introduced smaller, more fuel efficient SUVs to offset a possible rise in energy costs and sales of crossovers of all sizes have surged. According to our own Tim Cain, best-selling midsize sedans have slumped by 1 percent so far this year compared to last year. However, best-selling compact crossovers, such as the Honda CR-V, Toyota RAV4 and Ford Escape, have surged by 13 percent, year-over year. Last year, sales of full-size sedans slumped 8 percent from 2013.

That sales trend has so far been reflected in future production of cars by the Big Three. In its deal with the UAW, Ford signaled that it would likely end production of the Taurus in America and fill that void at its Chicago facility with the Lincoln MKC crossover.

FCA is expected to shift production of its Chrysler 200 and Dodge Dart to Mexico and build more Jeep Wranglers and Wrangler-based pickups at its Toledo facility as part of its deal with the UAW. Jeep is likely to build a three-row crossover, likely a Jeep Grand Wagoneer, in the U.S., and last month FCA chief Sergio Marchionne hinted that the company would study a Ram-based, full-size SUV.

According to Automotive News research, the cars that Ford and FCA are moving out of the U.S. — combined with the Buick Verano, which is expected to move to Mexico or China — account for 45 percent of the Big Three’s domestic car production in the U.S. so far this year.

Automakers such as Toyota, Honda, Subaru and Nissan are expected to keep production of many of their cars in North America. Toyota was rumored to move Camry production to Canada after announcing its decision to move Corolla production to Mexico. However, Toyota recently announced it would expand production of RAV4 in Canada, possibly quelling the Camry rumor. Last month, Honda started production of its Civic in Ontario and Indiana and Subaru will build its Impreza at its Indiana plant.

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28 Comments on “Big Three Go Long On SUV, Truck Production in North America...”

  • avatar

    Soul-less FWD/AWD econoboxes with 4-cylinders and $1500 turbo-4 options that can drive/park themselves for an extra $2995

    • 0 avatar

      ” SUVs are actually a growing segment not just in the U.S. but when you look to Europe and parts of Asia and China. It’s a worldwide growth story.”
      Understatement of the Century. SUV’s all sizes are everywhere and being produced in vast numbers

  • avatar

    I sure hope Toyota doesn’t put the 3.5L into the 2017 4Runner, I’ve heard it’s a torque less wonder.

    Me thinks Merkle doesn’t know the difference between an SUV and a crossover.

    • 0 avatar

      He knows. He just lumps CUVs and SUVs into one bucket because he wants consumers to see it that way. Haven’t you noticed that Ford markets the Explorer and Escape as SUVs?

      • 0 avatar

        For what it’s worth, puts all their non-sedan/hatch, non-truck vehicles under the “Crossovers & SUVs,” including the Wagon version of the Transit Connect. Most consumers don’t care and probably don’t even know the difference between a CUV and an SUV.

        • 0 avatar

          That’s true. However, they market the Explorer as an SUV and the Flex as a crossover. Customers don’t really care either way though. If I can get a 4WD Transit, I’ll stop complaining.

      • 0 avatar

        Ford initially marketed the Escape as an SUV before the team CUV became a term recognized by the public. The Explorer is still marketed as a SUV.

  • avatar

    Hope the big 2 know what their doing, what happens when gas goes up and it will or SUV’s fall out of fashion , may not happen but folks said that about Wagons, two door coups and hell family cars as well so who knows. This seems like short term thinking to me.

    • 0 avatar

      The desire for upright seating has been going on for 30+ years now. I think it’s more than just a passing craze.

      • 0 avatar

        Yep. Upright seating and large windows, though the designers are going the wrong way with up-sloping quarter panels and down-sloping rear roofs.

        The consensus is that low oil prices will last at least another five years. Still, there has to be employment and credit to keep selling $60,000 trucks. We could see an economic downturn, and low oil prices won’t help sell big vehicles.

  • avatar

    Wouldn’t a photo of an “SUV, Truck” have been more apropos for this article?

    Showing a crummy little loser sedan that’s being kicked down to a hot place was distressing to my sensitive nature.

  • avatar

    Why not concentrate on what you do best? While I really can’t think of the last time a Chevy car got my interest, a fully loaded Tahoe is a nice beast. If I lived in Waco I would probably have one. And with gas prices probably staying low for the next few years, the companies might as well try to make some money.

    • 0 avatar

      They should, but GM should just be careful not to have a repeat of the early-mid-00s when the SUVs were good but any car smaller than the Impala was mediocre at best.

  • avatar

    “Ford and Fiat Chrysler Automobiles will largely shift production of their cars to Mexico and bring more trucks and SUVs to North American facilities, according to their contracts with the United Auto Workers, Automotive News reported.”

    Mexico is in North America or more specifically part of the North American Continental plate.

    The confusion commonly comes from the fact that Mexico shares a common language with most of the Central and South American countries.

  • avatar

    ¿Te has manejado un Ford últimamente?

    Conduzca más.

  • avatar

    When I look at Ford or GM the only things I’m interested in are trucks. The next on the list are full sized truck based SUV’s. Lastly their pony cars. FCA – nothing until they can build something durable and then it would be pickups, Wranglers, and maybe a Hellcat.

    I must be the Big 3 minus 1’s typical consumer except that I don’t care where its made.

  • avatar
    Big Al from Oz

    The Big Three are reliant on the sheltered pickup truck market in the US. So having the US produce the full size pickup in the only real market for them shouldn’t surprise many, then add the protection offered.

    SUVs/CUVs, a similar story, especially the larger ones, except they don’t have the same protection. But, is it worth from a logistical perspective to move all of the large SUV part around the globe?

    The US will keep it’s large vehicle production, until the next oil price shock. Then the US will have little. Australia found this out when the consumer became more interested in smaller vehicles and CUVs. Ford and Holden just couldn’t compete.

    • 0 avatar

      Fullsize pickups are only “sheltered” by their awesomeness! You know you want one too… If you could, you’d have 2 of them!!

      You’d settle for a stinkin’ ’02 Titan…

      But no, we started moving away from, and in a big way, from large/barge sedans/coupes, long before CAFE tightened the screws on them.

      It wasn’t so much “smaller cars” Australians moved towards necessarily. No, it was the up to 59% tariff on import cars that allowed for Aussie built/specific and original Fords and Chevy/Holdens to flourish and even exist.

      Once the enormous tariffs were lifted, OZ Fords and Holdens didn’t do so well. By god they were still building and reliant on modern day El Camino and Ranchero equivalents, plus other bloated V8 sedans!

      Wtf did they expect when lifting such outrages tariffs???

    • 0 avatar

      @Big Al From Oz,
      More the case Ford had the Territory that sold well and generally very well. Holden CUV’s did not.
      Overall they relied on large sedans that public was moving away from

      • 0 avatar
        Big Al from Oz

        The Territory was a big seller only in Australia, like the Falcon and Commodore.

        By global standards they are a drop in the ocean. To manufacture vehicles production lines currently talk in the 100s of thousand to make a vehicle viable. This is why Australia shouldn’t have an auto manufacturing industry. The taxpayer will subsidise the existence of the manufacturers.

        Right now for the US to manufacture and assemble vehicles they are subsidised to the tune of $3 000 USD per vehicle. I’d rather have an American taxpayer subsidise a vehicle we buy from them, then US subsidising our industry.

        For someone to buy an American vehicle are receiving a $5 000 AUD discount. The American’s subsidise $3k and we don’t subsidise the $2k per vehicle. I love free trade, it ain’t so free for some! It a win – win for Australia.

        The upside to all of this is we have the most competitive market for vehicles globally, with one of the largest selection of vehicles globally.

        How many countries can boast they have a selection of 16 different pickup manufacturers! This is even discounting the grey trade full size pickups we get.

        This is why the chicken tax exists. The demand for say a midsize pickup in the US makes it unviable to produce 10 or 20 thousand, say, BT50s or Mitsubishi Tritons. So they can’t exist in the US unless the stiff 25% import tariff is removed to allow for their import.

        Australia has proven that you can import a thousand or so vehicles a year, and that is year after year, even econo boxes.

        The US is set to produce large vehicles and smaller vehicle production will diminish more slowly.

        Also, you’ll see the gradual increase in the price of the large manufactured US vehicles. This is already evident with the average transaction pricing of pickups increasing quite rapidly.

        • 0 avatar

          Why is it such a tragedy we don’t have every small pickup, but somehow OK we’re missing 1/2 the world’s small cars?

          Perhaps we have all we need. More than we need, probably.

          And in case you haven’t noticed, small vehicles don’t sell very well in the US. Nor are small car OEMs from India, Turkey, Thailand, China, etc, dying to come to the US.

          I’m sure they can think of less painful ways to flush capital earning down a hole.

          Yes it would also take the sale 100,000+ Tata compact cars to make US importing worthwhile. So what?

          So OZ is a magical place for all of the world’s autos… So F-ing what?

          Do you really think the Chevy Sonic would sell in any kind of meaning quantities in Europe? What a tragedy for all Europeans, no?

        • 0 avatar

          @Big Al from OZ
          The Falcon it was based on WAS the 2nd best selling Vehicle and was making a profit. Territory was OUTSELLING the Japanese SUV’s at one point and making a profit. Ford’s current imported products , including the locally designed, Ranger can only dream of doing that now.
          Ford is in big trouble here, but they saw value in the design, development and testing aspect of Ford Australia and have massively expanded those facilities.for developing future Ford Global products

  • avatar

    Can anyone explain to me how Germany, with higher labor costs, still produces small cars at a profit? This “we can’t do it” mea culpa is bullshit. The UAW is becoming as clueless as its’ overseers.

    • 0 avatar

      Easy. Price a car over there. A GTi is close to what we’d pay for a low 3 series. The market won’t sell/buy a truck, not at $10 per gallon, and tough parking. We get cars pretty cheaply, on a worldwide basis. Add the VAT and the access cost for that Golf is a LOT more than the 19k we pay….never mind the tiny engines, etc that won’t sell here.

      Also, the German worker is well cared for. It is only here that we seem to think that health care and retirement are optional.

    • 0 avatar
      Roberto Esponja

      Because people are willing to pay $60,000 for a C-segment sedan or CUV with leather-imitating vinyl seats, just so they can flaunt the 3-pointed star, blue-and-white roundel, or circle quartet of their choosing.

    • 0 avatar

      They charge more but the demand for smaller and medium sized cars is a lot larger than the US. They do not sell Pickups as such in Europe, but SUV’s are increasing like everywhere else

      • 0 avatar


        No, the market sets the price. OEMs are just along for the ride. But the US would laugh hysterically at what Europe pays for small cars and “luxury” with vinyl seats and 16″ wheels.

        More “demand” means more volume, therefor a lower price.

    • 0 avatar

      The UAW is becoming a hindrance in the US as well. Somehow it bargains for lower wages than what the transplant workers are getting in the Southern US States., bizarre

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