ok i couldnt get the link to work so here is the text that the article
has....
it is a reprint from www.delawareonline.com
Local plant relying on new Dodge SUV
The retooled Durango has a tough act to follow - and a local plant relying
on it
By LULADEY B. TADESSE
Staff reporter
10/05/2003
DaimlerChrysler AG will launch its redesigned Dodge Durango this week,
ushering in a vehicle expected to prop up the Dodge brand and continue the
success of the local plant that manufactures it.
But the long-awaited new Durango will face fierce competition, and industry
analysts are projecting it will not reach the sales peak of its namesake
predecessor.
"It will be the hottest sport-utility for nine months and then sales will be
running off," said Sean McAlinden, chief economist at the Center for
Automotive Research in Ann Arbor, Mich. "There are so many sport-utilities
on the market and so many new ones being introduced all the time."
DaimlerChrysler will mark the formal introduction of the new vehicle
Thursday when U.S. executives visit the Newark plant.
The 2004 Dodge Durango will debut in dealers' showrooms Nov. 15. The vehicle
is wider, taller and roomier than the previous model and will move from the
midsize to the full-size category. Its bigger size is expected to boost its
profitability, since larger SUVs tend to be more expensive and offer more
amenities that increase the price tag, analysts said.
The new vehicle also is critical to keeping the Newark plant viable and its
2,284 workers employed. The plant contributes $363 million directly to
Delaware's economy and $111 million to related businesses, according to the
Delaware Economic Development Office.
"Plants don't survive if they don't have new products," said James Wolfe,
plant manager.
DaimlerChrysler has pumped millions of dollars in recent years into the
plant to retool its equipment, make it more productive and prepare it for
the new vehicle. Company officials are hailing the plant as an example of
flexibility because it was able to reuse equipment and reduce by 30 percent
the costs associated with redesigning a vehicle.
Still, analysts said the plant's future success lies in its ability to
produce more than one vehicle. And so far the plant is limited to producing
the Durango. Company executives said it might be possible to assemble more
than one vehicle at a time at the plant in the future, but would not
elaborate on what that would entail or what products might be made there.
A bigger, but crowded market
Today's SUV market is bigger than it was when the Durango was launched in
1997.
Back then, SUVs made up 16 percent of U.S. vehicle sales - compared with 26
percent so far this year, according to Autodata Corp. in Woodcliff Lake,
N.J., which collects data on the auto industry.
When the first Durango appeared at dealerships six years ago, there were
about 14 midsize SUVs. The Durango was unique because it was the only one
that offered a third row of seats. Now there are at least 23 midsize SUVs
and a third row is standard.
"It's a much different market this year than it was back in 1997 when the
first Durango launched," said Jeff Schuster, director of North American
forecasting at J.D. Power and Associates in Troy, Mich.
The new Durango will compete against at least 10 full-size SUVs. It is a
smaller but increasingly competitive market that grew 18 percent between
2000 and 2002. But analysts project that growth in that segment will be flat
as more consumers choose crossover vehicles built on car platforms. Also,
fewer consumers buy full-size than midsize SUVs.
"In regards to sales, it will not have the same volume that the leaving
Durango had, and part of it might be associated to size," said Guido
Vildozo, automotive market analyst at Global Insight, based in Waltham,
Mass.
The profile of the average Durango buyer is not expected to change
dramatically, analysts said. About 66 percent of Durango buyers are male,
average age 42, who spend about $26,212 on the vehicle (not including
rebates), according to Power Information Network, an affiliate of J.D.
Power.
DaimlerChrysler has not said what the new Durango will cost.
The new Durango is expected to sell 133,000 units at its peak, or about 30
percent less than its predecessor, said Vildozo of Global Insight.
"There is so much market saturation with utility vehicles that the size of
the pie over the last five years is the same and unfortunately there are
more people cutting into the pie," said John Daqui, sales manager at Price
Dodge on U.S. 13 in New Castle, which sells the Durango.
Plant streamlined
Chrysler typically spends about $500 million to get a plant ready for a new
vehicle, according to Wardsauto.com, an online publication that tracks the
auto industry. Company officials would not say how much they spent, but they
said they were able to reduce costs by 30 percent because of the flexibility
of the Newark plant.
The improvements at the plant are expected to help it become more
productive. The Newark plant took 28.83 hours to produce one vehicle last
year, ranking seventh out of eight for midsize SUVs in the country surveyed
by Harbour and Associates in Troy, Mich., which monitors U.S. auto plants.
That was a 1.5 percent improvement over 2001, but still 24 percent less
productive than the benchmark of 23.22 vehicles per hour.
The plant produced 122,305 cars in 2002; annual capacity is 156,000.
Quality tests on the original Durango show that it has more problems than
the industry average for midsize SUVs, according to J.D. Power and
Associates 2003 Initial Quality Study, which does not provide specific
numbers by product. The Dodge brand as a whole, however, has 137 problems
per 100 vehicles compared with the benchmark of 133 problems per 100
vehicles, according to the study.
There have been no public reports on how the new Durango performs on quality
tests, but some analysts are hopeful.
Brain Walters, senior director of vehicle research at J.D. Power, said a
recent report on all replacement model launches and major redesigns since
1998 shows an average decline of five problems per 100 vehicles in the
launch year. And in recent years, Chrysler launches have had eight fewer
problems per 100 vehicles on average. "That is encouraging news for the
Durango," Walters said.
More products needed
Industry experts expect the new Durango will be well received, but they said
the future of the Newark plant will depend on whether additional products
are assembled there.
Even with the improvements, the plant isn't as flexible as some competitors'
plants. That is because only one vehicle is made there. When there is only
one product at a plant, the facility has to periodically shut down to adjust
for inventory instead of switching over to assemble another product. During
the last two years, as sales of the aging Durango sagged, the plant was
closed for several weeks to adjust for inventory.
Faced with lower profits and increasing competition, DaimlerChrysler has
been emphasizing cost cutting at its plants.
"All the assembly plants made it for four more years. ... You don't get a
promise much longer than that," said McAlinden, referring to the United Auto
Workers agreement signed last month between DaimlerChrysler and its union.
James Fisher, president of United Auto Workers Local 1183, which represents
about 2,100 plant workers, said the union has been trying to encourage
Chrysler executives to add another product. "I would welcome another product
in there with open arms because it would secure all our futures," he said.
Wolfe, the Durango plant manager, said he understands the importance of
having more products. But he said it is too early to say what else the plant
might manufacture.
"They are looking at derivatives of the Durango," Wolfe said. "At this
point, we only have that one product and that is what we are going to
concentrate on."
Reach Luladey B. Tadesse at 324-2789 or ltadesse@delawareonline.com
====================================
Amsoil Dealer ZO # 388299
contact info...
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1989 Dodge Daytona (1 of 1,196)
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