Fiat Chrysler To Invest $1B In U.S. Plants

Fiat Chrysler (NYSE:FCAU) has announced that it will invest $1 billion in two U.S. factories over the next few years, creating 2,000 new jobs. The automaker said it will modernize a factory in the Detroit suburb of Warren, Michigan, to increase production of hot-selling SUVs. It will also upgrade a factory complex in Toledo, Ohio with new equipment to make a new pickup truck.

Fiat Chrysler said the factory upgrades would be done in 2020. The company has not disclosed how much would be invested in each plant or how many new jobs would be created at each. The company did say that the investments are subject to negotiations and approval of tax incentives by local and state governments.

The company said that the moves are “a continuation of the efforts already underway to increase production capacity in the U.S. on trucks and SUVs to match demand.” CEO Sergio Marchionne said in a statement that the factory upgrades are “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.”

Fiat Chrysler has indicated that it wants to get out of producing small and midsize cars. Last year, the company announced that it would stop production of the Dodge Dart and the Chrysler 200 midsize car. The company is reportedly searching for an automaker that would build small cars under contract. Factories that make those products will be revamped to manufacture new trucks and SUVs.

The company says that this is the second phase of a plan it first made public a year ago. In July, the company announced that it would invest $1.5 billion into its plant in Sterling Heights, Michigan to modify it to make Ram pickups. The 3,000-worker plant closed last month as production for the Chrysler 200 ended.

The Warren plant will keep making Rams until Sterling Heights is updated. Then, the Warren plant will close temporarily while it is upgraded to make the large SUVs. The company also announced last summer plans to spend $1 billion to modify the Toledo factory for production of a new Jeep Wrangler.

The new Jeep pickup would be the company’s first pickup since the mid-1990s. In addition to the new pickup truck, the company is planning to add two more new Jeeps to its lineup. The company has not provided many details for the new products.

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