Fiat Chrysler Automobiles said Thursday it will invest more than $1 billion to modernize the company’s truck plant in Warren, Michigan, adding 2,500 jobs and moving production of its Ram Heavy Duty trucks from Mexico.
The changeover is to be complete in 2020.
The company said the new federal tax law made the shift possible. That legislation, signed into law in December, cut the corporate tax rate from 35 percent to 21 percent.
FCA also announced $2,000 bonuses that will be paid in the second quarter of this year to 60,000 hourly and salaried employees in the U.S., excluding senior leadership. Those bonuses are to be in addition to any profit sharing or performance bonuses the employees would receive this year.
“These announcements reflect our ongoing commitment to our U.S. manufacturing footprint and the dedicated employees who have contributed to FCA’s success,” Fiat Chrysler CEO Sergio Marchionne said in a news release. “It is only proper that our employees share in the savings generated by tax reform and that we openly acknowledge the resulting improvement in the U.S. business environment by investing in our industrial footprint accordingly.”
The investments will likely be one of the topics on tap Monday when Marchionne is scheduled to speak to reporters at the North American International Auto Show in Detroit.
The investments announced Thursday will be in addition to plans FCA unveiled last January when it said it would spend $1 billion at Warren Truck and in Toledo to expand Jeep production.
The company plans to build the Jeep Wagoneer and Grand Wagoneer in Warren, is retooling in Toledo to produce a Jeep truck and is shifting production of the Ram 1500 to Sterling Heights. That’s part of a broader plan that included shifting Jeep Cherokee production from Toledo to Belvidere, Ill.
Despite the shifting of Ram Heavy Duty production from Mexico, the Saltillo Truck Assembly Plant there will continue to operate. The company said that plant will be repurposed to build future commercial vehicles for global distribution.
The company said it has invested $10 billion in its U.S. manufacturing operations since June 2009.
Macomb County Executive Mark Hackel called the latest investment a great announcement, saying “we’re extremely grateful for FCA and Sergio making that commitment. … I can’t wait to give him a big hug at the auto show.”
Hackel noted the significance of bringing more Ram truck production to the county, which has seen substantial investment from automakers and suppliers in recent years.
“This has become somewhat of a Ram country here in Macomb County if you think about it because this is where it’s being built … and they’re bringing them up from Mexico,” Hackel said.
Brian Rothenberg, a spokesman for the United Auto Workers, offered cautious praise, explaining that the union had just been made aware of the announcement.
“While the news is positive, the UAW is reviewing the details,” Rothenberg said, noting union officials would likely have more to say later.