Fiat Chrysler pumps investment into factory

Fiat Chrysler Automobiles has vowed to pump US$4.5 billion into its five Michigan state production factories and build an entirely new facility.

The new Detroit factory will be solely for the future electrification of FCA’s hero Jeep brand model line-up, with two other factories getting plug-in hybrid production capacities.

FCA says it will tip $1.6 billion into converting its Mack Avenue Engine Complex into the production site for next-generation Jeep Grand Cherokee and a new large seven-seat SUV, while $900 million will “modernize and retool” the Jefferson North plant which will continue making Dodge Durango, and in preparation for the next Grand Cherokee.

Ram 1500 will get its own production upgrades courtesy of the Warren Truck 2017 investment increasing to US$1.5 billion. Both Warren and Mack plants will see capacity added to produce hybrid plug-in vehicle variants.

Pentastar six-cylinder engine production currently at the Mack I factory will cease by Q3, 2019, and be relocated at a cost of US$119 million to the Dundee Engine Plant.

FCA’s Sterling and Warren stamping plants will benefit from $400 million of investment into additional production.

Project plans and negotiations have been lodged with the cities of Detroit, Sterling Heights, Warren, Dundee and the state of Michigan, with the City of Detroit given 60 days to deliver on its commitments to the Mack and Jefferson North projects.

Mike Manley, chief executive FCA, says the reborn Mack facility would be the first new assembly plant built in Detroit in nearly three decades.

“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,” he says.

“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,” Manley explains.