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February 27, 2019

FCA announces big US capacity push; includes Jeep electrification

FCA (Fiat-Chrysler) is planning to build a new assembly plant in Detroit and add production at five existing Michigan facilities, creating nearly 6,500 Jobs.

By Sam Duke

FCA (Fiat-Chrysler) is planning to build a new assembly plant in Detroit and add production at five existing Michigan facilities, creating nearly 6,500 Jobs.

The company described the investment as the next step in its US industrialisation plan, announced in 2016 under the late Sergio Marchionne, to expand the Jeep and Ram brands, moving FCA away from declining passenger car segments.

FCA said a US$1.6bn investment would convert the Mack Avenue Engine Complex into a manufacturing site for next-generation Jeep Grand Cherokee and an all-new three-row full-size Jeep SUV, creating 3,850 new jobs.

A US$900m investment at Jefferson North involves a retool and modernisation for continued production of Dodge Durango and next-generation Jeep Grand Cherokee with 1,100 new jobs expected, FCA said.

Warren Truck 2017 investment increases to US$1.5bn for production of all-new Jeep Wagoneer and Grand Wagoneer, as well as continued assembly of Ram 1500 Classic with the addition of 1,400 new jobs.

FCA said all three assembly sites would also produce plug-in hybrid versions of their respective Jeep models with flexibility to build fully battery-electric models in the future.

In addition, Sterling Stamping and Warren Stamping plants are to receive more than US$400m total investment to support additional production, potentially creating about 80 new jobs at Sterling.

There will also be a US$119m investment to relocate Pentastar engine production currently at Mack I to the Dundee Engine Plant; production at Mack would end by Q3 2019.

The plans include the production of two new Jeep-branded white space products, as well as electrified models. The proposed projects would create nearly 6,500 new jobs.

The plant actions detailed in today’s announcement represent the next steps in a U.S. manufacturing realignment that FCA began in 2016. In response to a shift in consumer demand toward SUVs and trucks, the company discontinued compact car production and retooled plants in Illinois, Ohio and Michigan to make full use of available capacity to expand the Jeep and Ram brands. Those actions have resulted in the recent launches of the award-winning all-new Jeep Wrangler and all-new Ram 1500, and the introduction of the newest member of the Jeep family, the all-new Jeep Gladiator, at the 2018 Los Angeles Auto Show.

“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. “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.”

FCA said the investment package is part of the Company’s capital spending plan presented in June 2018.

Realignment of FCA US production operations

Over the past two years, FCA says it has realigned production at four plants in Illinois, Ohio and Michigan to increase capacity for the Jeep Cherokee, Jeep Wrangler and Ram 1500 light-duty truck, and created additional manufacturing capacity for the Jeep Gladiator in Ohio.

The investments included:

  • US$350m in the Belvidere Assembly Plant (Illinois) to produce the Jeep Cherokee, which moved from Toledo, Ohio, in 2017. More than 300 new jobs were added to support production, which launched in June 2017.
  • US$700m in the Toledo Assembly Complex (Ohio) to retool the North plant to produce the next-generation Jeep Wrangler. Approximately 700 new jobs were added to support production, which began in December 2017.
  • US$1.48bn in the Sterling Heights Assembly Plant (Michigan) to build the next-generation Ram 1500 truck, adding more than 700 new jobs. Production of the new truck began in March 2018. Production of the Ram 1500 Classic continues at Warren Truck (Michigan).
  • US$273m in the south plant of the Toledo Assembly Complex to prepare the facility to produce the all-new Jeep Gladiator. The new truck is scheduled to launch in the first half of 2019. 

In total, FCA says it has committed to invest nearly US$14.5bn in its US manufacturing operations, creating nearly 30,000 new jobs since June 2009.

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