DETROIT — IT was the car that symbolized Chrysler’s comeback from bankruptcy, and the star of its iconic Super Bowl ad five years ago that played up vehicles “imported from Detroit.”  And when Sergio Marchionne, the chief executive of Fiat Chrysler Automobiles, announced in 2011 that the company was paying back its lifesaving loans from the federal government, he did it in front of hundreds of cheering workers who made the Chrysler 200 sedan.  But despite its early promise as a competitor to top-selling models like the Toyota Camry and the Honda Accord, the 200 has floundered in the marketplace — and exposed Fiat Chrysler’s limitations in the midsize car segment.  In the first three months of this year, sales of the 200 in the United States dropped 63 percent from the same period in 2015. By contrast, the company’s overall sales have increased 9 percent.  Now, the plant that builds the 200, just outside Detroit in Sterling Heights, Mich., is idle, and its 3,200 workers have been laid off nearly every week since January.  In a red-hot market for new vehicles, it stands out as one of the few auto plants in the country that is running well below full capacity.  About 1,300 of those workers will go on indefinite layoff in July, as the Sterling Heights plant downsizes to a single shift and prepares to wind down production of the 200.  Mr. Marchionne confirmed this week that the plant would be converted to produce Ram pickups — Fiat Chrysler’s top-selling vehicles. In the process, he delivered a harsh assessment of the weak performance by the Chrysler 200, as well as the company’s compact Dodge Dart model.  “We sort of abandoned the notion of being able to withstand mediocre performance in some segments,” he told industry analysts Tuesday during a conference call on first-quarter results.  It is rare for auto executives to label their products as mediocre, and even more so when referring to a car like the 200 that was a cornerstone of Fiat Chrysler’s efforts to expand its share of the passenger-car market in the United States.  Despite a huge marketing push that included the Super Bowl commercial featuring the Detroit rapper Eminem, the 200 lagged badly in the brutally competitive midsize car segment that Toyota and Honda have dominated for years. Low gas prices also helped shift consumers away from cars like the 200 to sport utility vehicles and trucks.  “The marketing was stellar, but the product didn’t live up to the hype,” said Jack R. Nerad, an analyst with the auto research company Kelley Blue Book.  Mr. Nerad said the car had engine and transmission problems when it was introduced, and its quality paled in comparison with that of vehicles produced by Toyota and other rivals. In addition, its anonymous-sounding name and conventional styling never clicked with consumers.  “You can’t make a first impression a second time,” he said. “And when the 200 came out, people found it lacking, whether it was the transmission or the rear seat room or just the quality baggage attached to Chrysler cars.”  Instead of force-feeding the car on the market with higher incentives, Fiat Chrysler has slashed production to a minimum. The next step is exiting the segment entirely, although Mr. Marchionne has suggested the company may contract with another automaker to supply it with a replacement.  Either way, the fall of the 200 represents a rare defeat for Fiat Chrysler. The company’s sales in recent years have consistently outpaced the growth of the overall domestic market, and its pickups and Jeep sport utility vehicles are among the industry’s fastest-selling vehicles.  In the industrial city of Sterling Heights, the 200 was viewed as a savior for the local assembly plant, and a sign that the domestic auto industry had weathered the last recession.  “The 200 hasn’t performed as well as it was hoped,” said Mayor Michael C. Taylor. “No doubt about it — it’s disappointing.”  The company’s decision to cut back to one shift this summer will have an economic ripple effect on the city. “You don’t want to see headlines that it is losing a shift,” Mr. Taylor said. “But we can get through it.”  Hourly employees at the plant have worked a total of four weeks since January, according to Jodi Tinson, a spokeswoman for Fiat Chrysler. The rest of the time they have been laid off, and collecting unemployment checks and union benefits that total about 75 percent of their normal paychecks.  Once production is officially cut to one shift in July, about 1,900 workers will remain active and the other 1,300 will move to “indefinite” layoff status. It is one of the few instances in the industry in recent years in which workers have been indefinitely laid off because of poor sales.  Workers at the plant have ridden a roller coaster of emotions, dating to Chrysler’s bankruptcy in 2009, when the factory was a candidate to be closed permanently.  Chrysler’s merger with Fiat, and the introduction of the 200, saved the plant from extinction then. But the recent layoffs and production shutdowns put its future in doubt.  “We had people worried about their jobs,” said Ivan Garrett, a 23-year veteran worker at the plant. “We didn’t know what was going to come next.”  Because of his seniority, Mr. Garrett will not face an indefinite layoff this summer. He said he was hopeful that the conversion to pickup truck production would bring all the employees back to work eventually.  And although it appears that Fiat Chrysler’s ambitions to expand its car business have stalled, the company is eager to continue its shift toward manufacturing more pickups and sport utility vehicles.  In 2018, the Sterling Heights plant will build the next generation of the Ram. The factory that currently builds the truck, in the nearby city of Warren, will get a new Jeep product to replace it.  “The whole purpose of the realignment is not to lose any production of Jeeps and Rams,” said Richard Palmer, Fiat Chrysler’s chief financial officer.  As Mr. Marchionne remarked to analysts, replacing the 200 with more pickup trucks is a step toward “focusing on the relevant portion of our activities” — meaning more trucks and fewer cars.  “It’s refreshingly honest that he admits that making cars doesn’t make a lot of economic sense, and trucks do,” Mr. Nerad said. “You have to follow the money.”  A version of this article appears in print on April 29, 2016, on page B4 of the New York edition with the headline: A Symbol of Chrysler’s Comeback Slowly Fades Away. Order Reprints| Today's Paper|Subscribe
Production of a midsize car that once starred in a Chrysler commercial is winding down, and the plant where it was made will soon be making pickups.