City Council raises concerns over FCA plant expansion in Detroit
Detroit — The City Council raised numerous concerns during a subcommittee Thursday regarding Fiat Chrysler Automobiles NV's plans to expand its Mack Avenue facilities. Among them were the hiring of Detroit residents, environmental impact and increased truck traffic in the area.
As a result, some project-related items brought before the planning and economic development standing committee Thursday will return for further discussion May 16.
“From the perspective of the council person where the project is, I believe the process was rushed, and I believe as it was rushed the expectation is that this body would rush it as well,” Detroit City Councilman Andre Spivey said following nearly three hours of discussion on Thursday. “This is also the last stop for the project to go forward, and I think colleagues have outstanding questions and issues.”
Fiat Chrysler and the city announced in late February the automaker's plans to invest $1.6 billion in expanding its Mack Avenue facilities with a new plant and investing $900 million to modernize its Jefferson North Assembly Plant. The city worked to assemble acreage needed within that timeline. The automaker, the city and a neighborhood advisory council agreed to a community benefits agreement after a series of community meetings within that timeframe.
Council members focused on jobs for Detroiters during the meeting, with Council President Pro Tem Mary Sheffield among others calling for a set figure or percentage of guaranteed Detroit hires. As part of the community benefits agreement, FCA said it would give Detroit residents first access to apply for jobs. The plant expansion is expected to add 4,950 jobs.
“I struggle that we do not have anything in writing that commits a certain percentage of these jobs guaranteed going to Detroiters,” Sheffield said. “The only thing that’s in the development agreement and the PowerPoint slides, everything that’s been submitted is we are going to prioritize the hiring of Detroiters, which I think is great, but with the amount of effort from FCA, the (Detroit Employment Solutions Corporation) and the city there should a number.”
Ron Stallworth of FCA’s external affairs department said requiring a guaranteed number of Detroit hires could set the company up for a violation if the interest or ability to work isn’t there.
“We would like all of them to be Detroit residents,” he said. “All of them. We’d prefer that. To make a guarantee as to a certain number we don’t know we could fulfill, that we don’t know if desire exists for that number, it doesn’t make business sense.”
Spivey echoed Sheffield’s concerns and says he wants FCA to go overboard to have workshops and job hiring fairs. Spivey noted the Ilitch organization and the criticism that company faces regarding failing to deliver on promises it made related to Little Caesars Arena.
“I would not want you all to be in the same situation by not living up to what we ask you to do,” he said. “We are going to be on you all about hiring Detroiters. You won’t have a choice but to hire them because we are going to make sure they are prepared.”
FCA also fielded questions from council members regarding the environmental impact from the plant expansion.
Greg Rose, FCA’s director of environmental health and safety, said the permit the state issued the automaker on April 26 will make its paint shop the lowest emitting paint facility in Michigan.
Council President Brenda Jones expressed concern about the condition of the roads when the plant expansion brings an increase in trucks to the area.
Ron Brundidge, director of the city’s Department of Public Works, said that there is money budgeted for planned improvements to Conner Avenue between Jefferson and Mack, Kercheval from St. Jean to Mount Elliot and McClellan from Jefferson to Gratiot.
The discussion Thursday came as Moody’s issued a report saying that the city acquiring the land needed for FCA’s investment is a credit positive for Detroit.
“Growing its employment base is critical for Detroit because income taxes are its largest revenue source, comprising more than a quarter of operating revenue in fiscal 2018 (ended 30 June 2018),” Moody’s wrote in the short report. “Strong growth in income tax receipts has been a crucial ingredient in the city's recent robust financial performance.”
The rating agency said that the project comes at a when there is a flurry of news about auto sector jobs.
“Although overreliance on the auto sector carries risks for Detroit and the regional economy, expected job growth is welcome news, especially in light of General Motors Company's announcement in November 2018 that it will discontinue operations at its Detroit-Hamtramck Assembly plant,” Moody’s wrote.
“Originally slated for closure in June 2019, the company later announced that production will continue at the plant through January 2020. FCA's planned job additions will far exceed the number of jobs that will be lost with the shuttering of the Detroit-Hamtramck Assembly plant.”