Fiat Chrysler Automobiles NV plans to invest $4.5 billion to produce new Jeep models and boost Ram truck output, as it banks on selling more high-margin sport utility vehicles even as U.S. sales lose steam and a slew of rival offerings hit the market.
The Italian-American automaker is putting $1.6 billion into its Mack Avenue engine plant in Detroit to produce the next-generation Grand Cherokee, and an all-new, three-row version of that full-size SUV with an optional plug-in hybrid engine, Chief Executive Officer Mike Manley said on a call with reporters. It’s also spending $1.5 billion on its Warren, Michigan, truck plant to bring back the Jeep Wagoneer and Grand Wagoneer nameplates, and continue production of its Ram 1500 Classic truck through this year.
Those models will hit the market at a time when crosstown rivals General Motors Co. and Ford Motor Co. are relaunching storied models including the Ford Bronco and Chevy Blazer. An unexpected spike in inventory of Jeep’s iconic Wrangler already is stoking concern that the American SUV boom that’s fueled Detroit automakers’ profit is reaching its limits.
Here’s a breakdown of Fiat Chrysler’s investments in detail:
- Retooling of the Mack Avenue plant will start in June, with the three-row Grand Cherokee model coming off the production line by the end of 2020 and the new Grand Cherokee debuting in the first half of 2021. 3,850 new jobs created.
- Production of the Wagoneer and Grand Wagoneer models will start at the Warren plant in early 2021 Investments to enable plug-in hybrid and other electrified variants of new Jeep models will be made as demand develops in the U.S. market. The improvements are expected to add 1,400 new jobs.
- Manley says Fiat Chrysler confirms production of all-new Ram heavy-duty trucks will continue in Saltillo, Mexico plant, reversing an earlier decision to shift output to the U.S.
- Fiat Chrysler also will spend $900 million to retool another Detroit plant, Jefferson North, to continue production of the Dodge Durango SUV and make the next-generation Jeep Grand Cherokee, with 1,100 new jobs created.The company is also earmarking $400 million in upgrades for stamping plants in Warren and Sterling Heights, Michigan.
United Autoworkers Vice President Cindy Estrada said in a statement that FCA's announcement was "especially exciting given that these are good union jobs with union wages and benefits that have been collectively bargained for with the company."
IndustryWeek staff contributed to this article.