FCA to invest $1B in Warren, Toledo plants; add 2K jobs
Fiat Chrysler Automobiles NV on Sunday announced it will add 2,000 new jobs and invest $1 billion in plants in Michigan and Ohio to produce new Jeep vehicles.
The investment includes retooling and modernizing the Warren Truck Assembly Plant to produce the all-new Jeep Wagoneer and Grand Wagoneer. In addition, the south plant of the Toledo Assembly Complex will be upgraded to build an all-new Jeep pickup that is expected to be produced off the next-generation Jeep Wrangler.
Following the investment, the company said Warren Truck also will have the flexibility to produce the Ram heavy-duty truck, which is currently produced in Mexico. The company is not announcing that the plant will produce the vehicle; however, it could, if capacity is needed or moved. The pickup work would address some uncertainty among workers and analysts about the automaker's ability to fill the 3.31-million-square-foot facility, which has been producing trucks since it opened in 1938.
FCA US declined to give a breakdown of the jobs and investment between the two plants. The investment is expected to be completed by 2020, according to the Italian-American automaker.
The announcement is the final phase of an industrialization plan announced in January 2016, which was a significant part of the automaker's contract negotiations with the United Auto Workers in 2015. The plan called for the realignment of the company's U.S. manufacturing operations to move away from cars to more-profitable Jeep and Ram products.
"The conversion of our industrial footprint completes this stage of our transformation as we respond to the shift in consumer tastes to trucks and SUVs, and as we continue to reinforce the U.S. as a global manufacturing hub for those vehicles at the heart of the SUV and truck market," said Fiat Chrysler CEO Sergio Marchionne in a statement.
Marchionne appeared to try and distance the announced moves from having anything to do with President-elect Donald Trump, saying they "have been under discussion with Dennis Williams and the rest of the UAW leadership for some time."
Trump has repeatedly discussed renegotiating the North American Free Trade Agreement and slapping an up to 35 percent tax on vehicles imported to the United States from south of the border. Trump has often also criticized automakers for investing in Mexico.
UAW President Dennis Williams said the announcement shows the company's "commitment to the United States, UAW members and their employees."
"These investments will benefit UAW members their families and communities by providing greater job security and a World Class Manufacturing environment," he said in a statement.
The pickup for Toledo as well as the Wagoneer and Grand Wagoneer for Warren were previously mentioned by Marchionne. However, the number of additional workers and flexibility for the heavy-duty pickups was not known.
According to the union's contract summary last year, there was expected to be a "potential workforce reduction" of about 2,400 workers. The new jobs announced, which appear to be in-addition to the deal, could offset that; the Toledo-South plant was expected to retain its workforce. The jobs also could be added in 2020, which would be a year after the deal expires.
The company’s overall production plan for its domestic plants was loosely outlined as part of the automaker’s collective bargaining agreement with the union that involved investing $5.3 billion in production in the U.S., including $3.4 billion in assembly operations.
The first part of the production plan announced in July included investing $350 million in its Belvidere Assembly Plant in Illinois to produce the Jeep Cherokee, and $700 million in the Toledo Assembly Complex to retool the north plant to produce the next-generation Jeep Wrangler.
FCA US has committed investments of more than $9.6 billion in its U.S. manufacturing facilities and created 25,000 jobs since 2009.
Sunday’s announcement, the company says, is subject to the negotiation and final approval of incentives by state and local entities.