Fiat Chrysler investing $4.5 billion in Michigan production plants

Fiat Chrysler Automobiles announced plans to invest $4.5 billion in Michigan and create 6,500 new jobs by building a new assembly plant in Detroit and boosting capacity at existing plants.

The automaker said in a statement that the investment plans in Michigan are part of its industrialization plan to expand its Jeep® and Ram brands.

The world’s eighth largest auto maker unveiled plans to convert the Mack Avenue Engine Complex into the future assembly site for the next generation Jeep Grand Cherokee and a new three-row, full-size Jeep SUV.

The company says it is working with city and state officials on tax incentive packages. The city of Detroit has 60 days to assemble 200 acres (80 hectares) of land critical to the execution of the Mack project. A memorandum of understanding was signed on Tuesday between Detroit and Fiat Chrysler outlining the terms of the deal.

Additional investments are “subject to the successful negotiation and final approval of development packages with the state and other local governments,” the company said.

If the deals are approved, construction of the new assembly site is expected to begin by the end of the second quarter of 2019 and the first new vehicles could be in production by the end of 2020. The new plant would also be equipped to build plug-in hybrid models. A total of $1.6 billion will be set aside for the transformation.

Fiat Chrysler also said it plans on increasing investment in the Warren Truck plant to $1.5 billion for production of the Jeep Wagoneer and Grand Wagoneer and continued assembly of Ram 1500 Classic.

An additional $900 million is planned on being spent on modernizing the Jefferson North Assembly Plant for production of the Dodge Durango and next generation Jeep Grand Cherokee.

Other investments include:

  • $119 million in moving construction of the Pentastar engines – the 3.6-, 3.2- and 3.0-liter – to the FCA’s Dundee Engine Plant.
  • $245 million and $160 million, respectively, into the Warren Stamping and Sterling Stamping plants.

“Three years ago, FCA set a course to grow our profitability based on the strength of the Jeep and Ram brands by realigning our U.S. manufacturing operations,” said Mike Manley, Chief Executive Officer, FCA N.V.

“Today’s announcement represents the next step in that strategy. It allows Jeep to enter two white space segments that offer significant margin opportunities and will enable new electrified Jeep products, including at least four plug-in hybrid vehicles and the flexibility to produce fully battery electric vehicles.”

“This opportunity is unlike anything we have seen in decades,” Detroit mayor Mike Duggan said in a statement. Duggan added that the investments would take place “without displacing a single resident.”

Fiat Chrysler’s investment announcement is a welcome boost for Michigan’s auto industry, especially after rival General Motors Co. said that it plans on shutting two Michigan sites as part of a wider restructuring plan.