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On Eve of Detroit show, FCA Announces $1B Investment

Bill Koenig
By Bill Koenig Senior Editor, SME Media

On the eve of the  North America International Auto Show, FCA US LLC (Auburn Hills, MI), which includes the former Chrysler Corp., made a huge splash by announcing a $1 billion Michigan plant investment and moving a product line from Mexico to Michigan.

The unit of Fiat Chrysler Automobiles, around 6 p.m. on Thursday, issued its statement. FCA said it will move production of heavy-duty Ram trucks to Warren, MI, from Saltillo, Mexico, in 2020. That’s where the $1 billion plant investment comes in, billed as a modernization of the Michigan facility. FCA said it would add 2500 jobs as a result.  FCA said this was on top of a large investment at the Warren factory announced last year.

What’s more, FCA said it would pay a $2000 bonus to 60,000 hourly and salaried employees, which the company said was made possible by a huge corporate tax cut enacted late last year. Other companies, including AT&T, Comcast and Bank of America have announced $1000 bonuses because of the tax cut, according to a list compiled by USA Today.

FCA’s announcement gave the automaker an early leg up on attention from the Detroit auto show. General Motors Co. (Detroit) is scheduled to introduce a redesigned Silverado large pickup on Saturday evening. The truck is a major source of GM profit and one of the most significant introductions associated with the  show. The press previews for the show formally start on Sunday but GM is getting a head start.

Trump Factor

FCA also is a reminder how a US president is keeping tabs on where automakers are making investments.

President Donald Trump issued two tweets on Thursday approving of the FCA news. In one, he wrote, “More great news as a result of historical Tax Cuts and Reform: Fiat Chrysler announces plan to invest more than $1 BILLION in Michigan plant, relocating their heavy-truck production from Mexico to Michigan, adding 2,500 new jobs and paying $2,000 bonus to U.S. employees!”

In another, he said: “Chrysler is moving a massive plant from Mexico to Michigan, reversing a years long opposite trend. Thank you Chrysler, a very wise decision.”

During the 2017 auto show, automakers were adjusting to having Trump, shortly before being sworn into office, commenting about their investment decisions.

That’s still in effect a year later. Trump also tweeted his approval this week that Toyota Motor Corp. and Mazda Motor Corp. agreed to build a new $1.6 billion plant in Alabama, with production starting in 2021.

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