Fiat Chrysler Automobiles plans to open a new assembly plant in Detroit to expand its capacity to produce hot-selling sport-utility vehicles, according to several reports.
The automaker has yet to confirm that it will completely retool an old engine plant on Detroit’s east side, but company officials have, in recent months, indicated that they are strained to the limits of capacity at their existing light truck plants.
The news comes at an awkward time for FCA’s largest domestic rival, General Motors. GM’s CEO Mary Barra on Thursday spent a second day in Washington trying to minimize criticism of the automaker’s plan to close three assembly plants building slow-selling passenger car models like the Chevrolet Cruze. That would leave what has long been known as the Motor City with only one working assembly plant within its borders, at least unless and until the new FCA truck plant were to come online.
(Click Here to check out the all-new Jeep Gladiator pickup.)
According to reports that first appeared on CNBC and in the Detroit News, FCA is expected to formally announce next week a plan to reopen the long-closed Mack II engine plant, converting it to produce a new, three-row version of the Jeep Grand Cherokee. It is expected to go into operation around 2021.
A price tag was not disclosed but the automaker recently completed the conversion of its old car plant in the Detroit suburb of Sterling Heights to produce the all-new 2019 Ram pickup, a project that cost about $1 billion.
The plan would generate as many as 400 new jobs, according to the Detroit News, though that would seem to be unusually low for a new assembly plant. That figure might take into account transferring over currently idled workers from other FCA facilities.
The Euro-American automaker has all but exited the North American passenger car market. It builds only the Dodge Charger and Challenger muscle cars, as well as the Chrysler 300 sedan, at a factory near Toronto. But it has been escalating its push into the booming light trucks model, just last week revealing the long-awaited Jeep Gladiator pickup during a well-attended news conference at the Los Angeles Auto Show. Jeep hadn’t offered a pickup in nearly two decades. The Gladiator targets the once moribund midsize truck segment that has been rebuilding rapidly over the last five years.
Jeep has become, along with Ram, the money machine for FCA. The SUV brand has grown sales almost four-fold since Fiat took control of the then-bankrupt Chrysler at the beginning of the decade. It has both expanded its line-up and increased its presence globally, with new assembly plants added in Europe, Latin America and Asia.
(Jeep to launch Renegade plug-in hybrid in 2020. Click Here for the story.)
But Jeep continues to sit out one key segment, and that’s an important one. But with the opening of the Mack II assembly plant it will get a much-needed, three-row utility vehicle.
“This brand hasn’t grown by bringing segments to Jeep, it’s grown by bringing Jeep to new segments,” said Tim Kuniskis, the head of both the Ram and Jeep brands, during the L.A. debut of the Gladiator.
The automaker is also getting ready to retool another factory, the Warren Truck Assembly Plant, which has continued producing the last-generation Ram 1500 pickup. Once that project is completed it will switch to producing another pair of Jeeps, the Wagoneer and Grand Wagoneer.
The timing of the leaked FCA plans couldn’t be worse for GM and its CEO. The automaker announced late last month that it would close five plants, including three assembly lines, while dropping six slow-selling sedan nameplates. Those moves would cost about 6,700 jobs by late 2019. But GM is already moving to trim 15% of its salaried and contract white-collar workforce, impacting another 8,100 jobs.
The plan has generated intense criticism, including call-outs by President Donald Trump who warned he would move to penalize the company.
Barra has been meeting with officials from Michigan and Ohio, as well as others on Capitol Hill to explain the reasoning for the cuts. She has suggested she is keeping an “open mind,” and some hope GM may be laying in place a bargaining tactic as it prepares to return to the bargaining table with the United Auto Workers Union next year.
Separately, Ford created headaches for GM earlier this month when it said that rather than lay off workers, it would shift them from plants making slow-selling products to those where demand is outstripping production.
(For more on FCA’s aggressive product plan for the next 5 years, Click Here.)