Economic slump hurts sales of Belvidere-built vehicles

By Alex Gary

BusinessRockford.com

Dealers worldwide sold fewer Dodge Calibers, Jeep Compasses and Jeep Patriots than were produced at Chrysler LLC’s Belvidere assembly plant in June, the first time since November that production outpaced sales.

The fuel-efficient Belvidere trio — each capable of reaching 28 mph under optimal conditions — had been one of the few bright spots in a tough year for the Auburn Hills, Mich.-based automaker.

In May, dealers worldwide sold 36,555 Calibers, Compasses and Patriots, the highest since the line was launched in January 2006. But in June, sales of the three sank to 24,507, with significant drops in its United States, Mexican and international markets. Only Canadian dealers had a decent month.

Workers at the Belvidere plant, in the meantime, turned out 26,624 of the vehicles, including a surprising 6,244 Jeep Compasses, which have reached the 6,000 mark just twice in the past 12 months.

Of course, it wasn’t only the Belvidere-built cars that struggled in June. Chrysler as a whole had just 169,284 sales, compared with 238,937 sales in June 2007.

And Chrysler wasn’t the only automaker to struggle. Sales were off for General Motors Corp., Ford Motor Co. and Toyota Motor Co. as car buyers continued to shun larger trucks and SUVs because of gasoline prices and overall concerns about a shaky economy.

Still, Chrysler’s struggles led to increased speculation that the company may be on the verge of filing for bankruptcy. Earlier this month, Chrysler officials insisted that although sales are falling, costs have been cut enough that the company has improved its financial position. Chrysler is now 80.1 percent owned by the New York-based private equity firm Cerberus Capital Management and does not issue quarterly earnings.

With 2,700 workers at its Belvidere plant, Chrysler is the largest manufacturing employer in the Rock River Valley.

Although June was a struggle, thanks in large part to high gas prices pushing buyers to smaller vehicles, dealers are on pace to sell more than 360,000 Belvidere-built vehicles in 2008, which easily would be the most this decade and perhaps the highest total ever.

Through June, dealers had sold 87,398 Calibers, 59,432 Patriots and 34,758 Compasses. The Caliber and Compass are actually slightly behind their 2007 sales pace, but Patriot sales are 175 percent ahead of 2007, when the car hadn’t hit full production.

Reach Assistant Business Editor Alex Gary at agary@rrstar.com or at 815-987-1339.