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Fiat Chrysler to add second Jeep assembly plant in Detroit: sources

Stock MarketsDec 06, 2018 09:37PM ET
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© Reuters. Car manufacturers display their wares on the show floor of the North American International Auto Show in Detroit

(Reuters) - Fiat Chrysler Automobiles (MI:FCHA) (N:FCAU) plans to build Jeep Grand Cherokee SUVs in a mothballed Detroit plant in 2020, four people familiar with the plans told Reuters on Thursday.

News of the Fiat Chrysler's new plant leaked on the same day General Motors Co (N:GM) Chief Executive Mary Barra was finishing a two-day visit in Washington with lawmakers furious over the carmaker's plan to close five North American assembly plants next year and cut up to 15,000 jobs due to weak demand for sedans and small cars in the U.S. market.

Fiat Chrysler plans to revive Mack Avenue Engine II, which has been idled since 2012, as a vehicle assembly plant to provide additional capacity to build the redesigned Grand Cherokee, including a new three-row version, said the sources, who asked not to be identified.

Fiat Chrysler declined to comment.

FCA, which phased out production of sedans in the U.S. market, builds its two-row Grand Cherokee at its Jefferson North plant and needs additional capacity.

The move could add at least 100 and up to 400 jobs in the city, according to the Detroit News, which earlier reported on Fiat's plans. However, a source told Reuters the employment figures will be much higher.

News of Fiat Chrysler's plan may put pressure on GM to respond, coming moments before Barra approached the cameras on Capitol Hill to discuss her meetings with lawmakers.

GM has come under intense criticism from both Democratic and Republican lawmakers as well as U.S. President Donald Trump for its plan, with many asking the automaker to reverse its decision.

Last week, Trump demanded GM add a new product at a plant in Ohio targeted for closure and later threatened to cut electric vehicle subsidies.

Trump has repeatedly praised Fiat Chrysler for announcing it would shift truck production from Mexico to the United States. The White House did not immediately comment on Fiat Chrysler’s plans on Thursday.

GM's closures could become a campaign issue in 2020, with Democrats arguing it is evidence the corporate tax cuts approved a year ago have not deterred companies from closing plants. Trump made restoring auto production a top priority of his campaign - and also praised Germany's BMW for considering plans to build a new transmission plant in the United States.

Fiat Chrysler to add second Jeep assembly plant in Detroit: sources
 

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