Fiat Chrysler investing $1B in U.S. as auto industry responds to Trump

FCA confirmed plans for three new Jeep vehicles as Trump Sunday, days after Trump fired warning shots over the bow of several of the companys chief rivals. PHOTO: FCA

AUBURN HILLS, Mich.—Following a week of dramatic turns in the auto industry’s relationship with the next president of the U.S., Fiat Chrysler Automobiles has announced plans to invest $1 billion in two manufacturing plants in the American Midwest.

Last week Donald Trump threatened both General Motors and Toyota with a tax for producing vehicles south of the border, while Ford announced it would cancel a $1.6 billion assembly plant planned for San Luis Potosi, Mexico.

Despite seemingly bowing to the political pressure, Ford did not change course on plans to move production of its Focus compact to Mexico, and cited market forces for cancelling the plant as opposed to pressure from the President-elect.

GM CEO Mary Barra, meanwhile, said Trump’s criticism won’t push the company to change its plans, while Toyota also stood its ground.

For its part, FCA took the opportunity to finalize the second-phase of an industrialization plan the company announced early last year.

Using the $1 billion investment, the automaker plans to retool and modernize its Warren Truck Assembly Plant in Michigan to produce the revived Jeep Wagoneer and Grand Wagoneer, as well as retool the south plant at its Toldeo, Ohio campus to make way for an all-new Jeep pickup truck.

“The conversion of our industrial footprint completes this stage of our transformation as we respond to the shift in consumer tastes to trucks and SUVs, and as we continue to reinforce the U.S. as a global manufacturing hub for those vehicles at the heart of the SUV and truck market,” Sergio Marchionne, the company’s CEO, said in a statement.

“These moves, which have been under discussion with Dennis Williams and the rest of the UAW leadership for some time, expand our capacity in these key segments, enabling us to meet growing demand here in the U.S., but more importantly to increase exports of our mid-size and larger vehicles to international markets,” Marchionne added.

Fiat Chrysler said the investment in Warren, Mich. will also allow the plant to build Ram heavy duty pickups, which are currently built in Mexico—though it did not release any details about relocating the program.

In response Monday, Trump voiced support for both the Ford and Chrysler investment decisions.

“It’s finally happening – Fiat Chrysler just announced plans to invest $1BILLION in Michigan and Ohio plants, adding 2000 jobs. This after Ford said last week that it will expand in Michigan and U.S. instead of building a BILLION dollar plant in Mexico. Thank you Ford & Fiat C!” Trump said in a pair of tweets.

The automaker plans to complete the upgrades at both plants by 2020.