Fiat Chrysler to Invest $1.48B in Sterling Heights Assembly Plant

STERLING HEIGHTS, MI — Fiat Chrysler Automobiles NV plans to invest $1.48 billion in its Sterling Heights Assembly Plant to build the next-generation Ram 1500 pickup truck after production of the Chrysler 200 midsize sedan ends in December, according to media report

The announcement came Tuesday at a meeting of the Michigan Strategic Fund, which approved a 15-year property tax exemption to equip the plant, according to the Michigan Economic Development Corp. The tax exemption is valued at $11.3 million on up to $1 billion in equipment for the plant, according to the Detroit Free Press.

It’s the second tax incentive approved FCA this year by the Michigan Strategic Fund. A five-year exemption valued at $770,904 was approved in April to assist the Auburn Hills-based automaker in a $74.7 million investment that will retain 245 jobs at Fiat Chrysler’s Trenton North Engine Plant, where next-generation, 2-liter-four-cylinder engines will be produced.

Fiat Chrysler did not disclose how long the retooling would take or the number of jobs the investment could create, but it likely secures the future of the Sterling Heights plant, which was on the automaker’s closure list in 2009 when it was going through Chapter 11 bankruptcy.

“This one is going to be an incredible investment,” Macomb County Executive Mark told the Detroit Free Press.

“This is now the largest one-time corporate investment in the City's history, and once again validates Sterling Heights as an epicenter of economic development activity in the Metro Detroit region,” Sterling Heights Mayor Michael Taylor said in a statement.
The automaker could have move Ram production elsewhere in the United States or to one of its offshore facilities, as it did with a decision to build replacement vehicles for the Jeep Compass and Jeep Patriot at a plant in Mexico. Production of the two vehicles, currently in Belvidere, IL, is scheduled to end.
The company had considered moving Ram pickup production to plants in Toledo, OH, or Belvidere, Christine Estereicher, senior manager of state relations, said.

"The planned investment to re-tool and re-configure the existing assembly plant is so large, FCA US LLC could construct a new facility anywhere in the North American region at the same cost," Marcia Gebarowski, MEDC's senior development finance manager said in a memo to the Michigan Strategic Fund Board.
In April, Fiat Chrysler said it was indefinitely laying off about 1,420 workers, including 1,300 at the Sterling Heights Assembly Plant as part of a sweeping plan that affected at least five assembly plants in North America.

The Warren Truck Assembly Plant, where the Ram 1500 is currently produced, isn’t expected to sit idle. In April Fiat Chrysler CEO Sergio Marchionne said the Jeep Wagoneer, a large SUV the automaker plans to launch in 2018, would be produced in Warren.

However, FCA said in its statement Tuesday that plans for the future of Warren plant will be announced at a later date.

Image credit: Joe Wilssens / Chrysler Group LLC