Sergio hopes US employees will be smiling, too

Sergio hopes US employees will be smiling, too

Fiat Chrysler Automobiles (FCA) has announced a number of investments in the US that it says are supported by US tax reform measures passed late last year. The company announced an additional  investment in its US manufacturing operations (part of a sourcing switch away from Mexico) and a bonus for employees described as a 'special payment to recognise employees for their continued efforts toward the success of the company'.

The company confirmed that it will invest more than USD1 billion to modernise the Warren Truck Assembly Plant (Michigan) to produce the next-generation Ram Heavy Duty truck, which will relocate from its current production location in Saltillo, Mexico, in 2020.

This investment is in addition to the announcement made in January 2017, which committed to spending a portion of USD1 billion in Warren Truck Assembly to expand the Jeep product line with the addition of the all-new Jeep Wagoneer and Grand Wagoneer. The Saltillo Truck Assembly Plant will be repurposed to produce future commercial vehicles for global distribution.

To support the increased volume at the Warren facility, 2,500 new jobs will be created, above and beyond the jobs announced as part of the January 2017 announcement.

Bonus payments

FCA also said it will make a special bonus payment of USD2,000 to approximately 60,000 FCA hourly and salaried employees in the US, excluding senior leadership. The payment will be made in the second quarter of this year, and will be in addition to any profit sharing and salaried performance bonuses that employees would otherwise be eligible to receive in 2018. The special bonus will be paid to all eligible employees of the FCA automotive and components operations in the US.

"These announcements reflect our ongoing commitment to our U.S. manufacturing footprint and the dedicated employees who have contributed to FCA's success," said Sergio Marchionne, Chief Executive Officer, FCA. "It is only proper that our employees share in the savings generated by tax reform and that we openly acknowledge the resulting improvement in the US business environment by investing in our industrial footprint accordingly."

Investment in US up

FCA says it has invested USD10 billion in its US manufacturing operations since June 2009. Most recently, the company announced investments totalling USD3.5 billion, with the addition of 3,700 new jobs, to strengthen its US manufacturing base, and align US capacity to extend the Jeep and Ram product lines.

Those investments and related actions involved production shifts at three plants in Illinois, Ohio and Michigan to gain capacity for the Jeep Cherokee, Jeep Wrangler and Ram Light Duty truck, and the introduction of three new Jeep models at plants in Ohio and Michigan.

The investments include:

  • USD350 million 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.
  • USD700 million in the Toledo Assembly Complex (Ohio) to retool the North plant to produce the next-generation Jeep Wrangler. Approximately 700 new jobs will be added to support production.
  • USD1.5 billion in the Sterling Heights Assembly Plant (Michigan) to build the next-generation Ram 1500 truck. More than 700 new jobs will be added to support production.
  • USD1 billion in the south plant of the Toledo Assembly Complex to prepare the facility to produce an all-new Jeep truck, and in the Warren Truck Assembly Plant to modernise the plant to build the all-new Jeep Wagoneer and Grand Wagoneer. More than 2,000 new jobs will be added at these two plants to support production.

FCA said the plant investment actions announced today are subject to the negotiation and final approval of incentives by state and local entities.

The latest FCA investments follow speculation that the highly debt laden company could be willing to sell brands or parts of its operations.

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