FCA to invest $4.5B in Detroit with new assembly plant and expanded production

Fiat Chrysler Automobiles NV said on Tuesday it will invest $4.5 billion to build a new assembly plant in Detroit and expand production in five other Michigan plants, which would create 6,500 jobs in the state.

The assembly plant would be created by including converting an existing engine plant in Detroit (the Mack Avenue Engine Complex). The company wants to expand its popular Jeep model lineup and eventually produce hybrid and fully-electric models.

"To be standing here today, talking about being back in the city of Detroit is truly remarkable," said Detroit Mayor Mike Duggan.

FCA plans to start construction on the new Detroit facility in the third quarter of 2019 and to start production of a new three-row SUV by the end of 2020, followed by a revamped version of the Grand Cherokee in the first half of 2021.

It's the first new assembly plant to be built in the city of Detroit in nearly three decades, according to FCA.

FCA CEO Mike Manley said the announcement represents the "next step" in their growth strategy. 

"It allows Jeep to enter two white space segments and will enable new electrified Jeep products."

The automaker will also start production of its Wagoneer model and the Grand Wagoneer, a new three-row luxury SUV, at a plant in Warren in the first half of 2021.

60 days to acquire property, confirm deal

The City of Detroit has 60 days to acquire property required for one of the five plant projects, at what is currently the Mack Avenue Engine Complex.

Duggan said the land acquisition will require "voluntary" cooperation. FCA plans to have the plants built to sync with the production of a new model year. 

"You're in an interesting situation," said Duggan, adding that they need 200 acres of land nearby the Mack plant to accommodate parking and storage. There are also environmental and community factors to consider before construction begins. 

FCA has committed to working on community initiatives that will "benefit the city's residents," said FCA COO Mark Stewart. 

Duggan said they plan to build the plants without putting anyone out of their homes, but some regular traffic routes will be adjusted. Duggan also said he hopes to complete most of the land transfers through swaps, acknowledging that the City of Detroit "doesn't have a lot of money in the bank."

"Tribute" to Detroit auto workers 

Mich. Governor Gretchen Whitmer said the deal was "incredible news."

"We need to keep our foot on the gas as we work to build a Michigan where businesses can find the resources and talent to thrive in the state," said Whitmer. 

Whitmer said this FCA investment proves that Michigan is on the right path.

"I think it is a tribute to the Detroit auto workers," said Duggan. "There's a lot at stake."

Even if the FCA deal isn't approved, Duggan said construction begins next week on revamping some of the roadways and neighbourhoods.

The new plants bring FCA's total jobs created up to 30,000 — with $14.5-billion in investments in Michigan alone.