Fiat Chrysler Automobiles will invest $4.5 billion in five Michigan assembly plants so it can build more Jeeps, including electrified models, and continue production of the Ram 1500 Classic pickup that has been offered mostly to fleet purchasers, the company announced.
The investment will enable FCA to follow through on a five-year master plan announced in 2016 in which the company stated its goal to expand Jeep and Ram and streamline its passenger cars. The plan was then CEO Sergio Marchionne's final initiative to reshape FCA before his death in July.
The Jeep and Ram brands have driven FCA's financial success over the past decade," said Karl Brauer, executive publisher of Autotrader and Kelley Blue Book. "Investing in these brands and modernizing them with electrification technology will underpin FCA's future growth. Ram continues to benefit from ongoing truck demand in the U.S., while Jeep is a globally recognized American icon with expanding potential in China, India, Europe, and Brazil."
The plan involves the shifting of production resources and additional investment of $1.6 million in the Mack Avenue Engine Complex; $1.5 billion in Warren Truck; $900 million in Jefferson North; and $119 million to relocate Mack engine production to the Dundee Engine Plant. Additionally, FCA will invest $245 million in Warren Stamping and $160 million in Sterling Stamping to support the additional production.
The investments will enable FCA to build the new Jeep Wagoneer and Grand Wagoneer SUVs at Warren Truck. FCA is also extending production of the Ram 1500 Classic at the plant to meet market demand.
FCA plans to introduce two new Jeep vehicles in "white space" segments and will produce plug-in hybrid models of four Jeeps at three of the plants, including the Wagoneer, Grand Wagoneer, and Grand Cherokee. The investments would allow FCA to produce a battery-electric vehicle in the future. The investment in Jefferson North will also enable continued production of the Dodge Durango, including the Durango Pursuit police vehicle.
The projects are contingent on land acquisition and the negotiation of development incentives with the cities of Detroit, Sterling Heights, Warren, Dundee, and the state of Michigan.
The move could bring more vehicle choice for fleet purchasers and better vehicle quality, said Tom Coffey, senior vice president of sales for Merchants Fleet.
"It's a big investment especially as the Ram and Jeep models will be built domestically but probably necessary as GM and Ford will no doubt fight to maintain and even try to expand their current market shares with their own improved products," Coffey said. "In the end it’s a great opportunity for fleets to improve their efficiencies as new and improved choices become available."