Fiat Chrysler to add new assembly plant to build SUVs in Detroit

New autoworker jobs are headed to Detroit as Fiat Chrysler plans to add a new assembly plant in the city to build SUVs.

The news marks a contrast to General Motors’ announcement last week that it would “unallocate” five plants in North America, including its Detroit-Hamtramck plant, which makes the Chevy Volt.

Rumors have abounded for weeks about FCA’s plans in the city, but company officials have declined comment. Numerous published reports on Thursday, confirmed independently,  provided details about the new operations.

FCA plans to revamp its Mack Avenue Engine II plant, turning it into a vehicle assembly plant to produce a new three-row Grand Cherokee. Meanwhile, the nearby Jefferson North Assembly plant, which makes the current Grand Cherokee, will eventually be retooled in line with future production plans. Mack II has been offline since 2012.

Reports earlier in the day noted that the new SUV would be for the 2021 model year.

The news comes as FCA’s sales have risen in recent months on the strength of its Jeep and Ram brands, showing that its early bet to shift production away from passenger cars to SUVs and trucks is paying off. FCA unveiled a new midsize truck, the Jeep Gladiator, at this year’s Los Angeles Auto Show. That vehicle will be produced in Toledo, Ohio, where the newest version of the iconic Jeep Wrangler is also being produced.

The Italian-American automaker’s expansion plans could help ease the sting for the Motor City of potentially losing GM’s Detroit-Hamtramck plant, which employs more than 1,500 workers. GM’s announcement and the expected loss of thousands of good-paying automotive jobs in the United States and Canada have been met with anger from union leaders, politicians, including President Donald Trump, and workers.

GM, however, is not the only one of the Detroit Three expected to cut jobs. Ford has launched an $11-billion global restructuring plan designed to create a more efficient company that results in fewer white-collar jobs overall. Morgan Stanley this week said the plan could cost 25,000 employees their jobs, although Ford President and CEO Jim Hackett appeared to dismiss that number during an event Tuesday.

Cindy Estrada, the vice president/liaison between FCA and the UAW, could not be reached for comment on the FCA news.

An official announcement on the new plant could come before the end of the year.

Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions, said the Jeep brand has been expanding its reach and needs extra capacity as the brand moves to new global markets. The specific rollout of production at the Detroit plants follows FCA’s previous game plan for other facilities.

“As FCA has done in the recent past, they will use the new plant to help ramp up production of the next-generation Grand Cherokee while winding down the old generation in order to keep supplies steady on this high-profit product. Jeep will add a new three-row version of the Grand Cherokee alongside the all-new 2-row version,” Fiorani said.

Production of the three-row Grand Cherokee is expected before the end of 2020, with the new two-row Grand Cherokee following about six months later.

Jeff Schuster, president and forecaster for LMC Automotive, said additions would be needed to prep the engine plant to assemble vehicles.

“They would have to add a paint shop, body shop and other areas,” he said, adding that the plant is expected to create hundreds of jobs.

Schuster added, “If you look at FCA’s utilization, it’s running extremely lean.  … You can only squeeze so much out of existing factories. This property exists.”

At issue is what can be done to retrofit the plant in a cost-effective way, said Schuster, whose company provides market forecasting for auto manufacturers, suppliers and the financial community.

An official at Walbridge Aldinger Company, a Detroit-based general contractor that oversees construction management of major projects like a factory retrofit, referred inquiries directly to FCA.

Read the original article here.