Sat, Jan 13, 2018 - Page 10 News List

Fiat Chrysler to invest US$1bn in Michigan plant

‘GREAT ANNOUNCEMENT’:US officials took credit for the firm’s move to create 2,500 jobs in Michigan, with the US vice president tweeting ‘America First policies are working’

Reuters, DETROIT, Michigan

Fiat Chrysler Automobiles NV on Thursday said it would shift production of Ram heavy-duty pickup trucks from Mexico to Michigan in 2020, a move that lowers the risk to the automaker’s profit should US President Donald Trump pull the nation out of the North American Free Trade Agreement (NAFTA).

Fiat Chrysler said it would create 2,500 jobs at a factory in Warren, Michigan, near Detroit and invest US$1 billion in the facility.

The Mexican plant is to be “repurposed to produce future commercial vehicles” for sale in global markets, the company said.

Mexico has free-trade agreements with numerous nations.

Fiat Chrysler chief executive Sergio Marchionne a year ago raised the possibility that the automaker would move production of its heavy-duty pickups to the US, saying tax and trade policy would influence the decision.

If the US exits the NAFTA, it could mean that automakers would pay a 25 percent duty on pickup trucks assembled in Mexico and shipped to the US.

About 90 percent of the Ram heavy-duty pickups made at Fiat Chrysler’s Saltillo plant in Mexico are sold in the US or Canada, company officials said.

Negotiators for the US, Mexico and Canada are scheduled to meet later this month for another round of talks on revising the NAFTA.

US Vice President Mike Pence praised Fiat Chrysler’s announcement.

“Manufacturing is back. Great announcement. Proof that this admin’s AMERICA FIRST policies are WORKING!” Pence tweeted.

Chrysler raised its output in Mexico by 39 percent last year to 639,000 vehicles, according to Mexican government data.

That made Fiat Chrysler the third-largest producer of vehicles in Mexico last year, after Nissan Motor Co and General Motors Co.

Fiat Chrysler Automobiles Mexico spokesman Miguel Ceballos said there was no plans to either reduce or grow the workforce in Mexico.

Meanwhile, Toyota Motor Corp and Mazda Motor Corp on Wednesday announced they would build a new US$1.6 billion joint venture auto assembly plant in Alabama, drawing praise from Trump.

“Good news: Toyota and Mazda announce giant new Huntsville, Alabama, plant which will produce over 300,000 cars and SUV’s a year and employ 4000 people. Companies are coming back to the US in a very big way. Congratulations Alabama!” Trump tweeted on Wednesday.

Toyota and Mazda join Daimler AG’s Mercedes-Benz, Honda Motor Co and Hyundai Motor Co in operating factories in Alabama.

Alabama’s total incentive package to Toyota and Mazda is to top US$700 million after local incentives are added to what the state offered to land the companies’ new US factory.

Huntsville City Council on Thursday approved a US$320 million local incentive package. That was in addition to US$380 million announced by the state in tax abatements, investment rebates and the construction of a worker training facility.

Huntsville Mayor Tommy Battle said before the council vote that the joint-venture factory, which is to employ about 4,000 people, would bring economic benefits to the region for generations.

“If there ever was a slam-dunk deal, this is a great one,” Battle said.

The new plant in Huntsville — already a hub for the region’s budding aerospace industry — is to produce 300,000 vehicles per year, a combination of the Toyota Corolla compact car and a new small crossover SUV from Mazda.

Production is targeted to begin by 2021.

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