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FCA to Reopen Idle Detroit Factory to Build the New Jeep Cherokee

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【Summary】As General Motors announces massive layoffs and the closure of several U.S. plants, Fiat Chrysler Automobiles (FCA) is looking to reopen a idle Detroit assembly plant to build the upcoming full-size Jeep Grand Cherokee SUV.

FutureCar Staff    Dec 07, 2018 11:57 AM PT
FCA to Reopen Idle Detroit Factory to Build the New Jeep Cherokee

DETROIT— As General Motors announces massive layoffs and the closure of several U.S. plants, Fiat Chrysler Automobiles (FCA) is looking to reopen a idle Detroit assembly plant to build the upcoming full-size Jeep Grand Cherokee SUV.

FCA, based in nearby Auburn Hills, plans to revive Mack Avenue Engine II, which has been idled since 2012, and retool it to build a new three-row Jeep Grand Cherokee for model year 2021, multiple sources familiar with the plans told The Detroit News. The move could add as many as 400 new auto jobs in the city.

The renovated Mack Avenue facility would be the first new auto assembly line to open in Detroit since 1992.

When Mack II plant begins production of the larger three-row Grand Cherokee, FCA would begin retooling Jefferson North Assembly Plant — directly across the street from the Mack Avenue Engine Complex — to make way for the next generation of the two- and three-row Grand Cherokee.

A public announcement is tentatively scheduled for the end of next week.

"FCA is essentially out of capacity," said Jeff Schuster, an analyst with LMC Automotive in Troy to the Detroit News. "They're kind of running up against being against full capacity. This is a very different situation than what GM is dealing with."

Fiat Chrysler's plant capacity utilization in November hit 92 percent in North America.

jeep.jpg

The 2019 Jeep Grand Cherokee

In 2016, FCA's late CEO, Sergio Marchionne, shocked the industry when he confirmed FCA would abandon car production in the U.S. and retool the plants to build the more profitable Ram pickups and Jeep SUVs. The plans to convert the Mack II factory to build the Grand Cherokee is part of that strategy.

FCA's plans to open a new plant are a stark contrast to GM's.

FCA's plans for a new Detroit plant come as GM CEO Mary Barra appeared on Capitol Hill for a second straight day to defend the company's decision to lay off 14,000 workers—15 percent of its North American workforce— and shutter several plants. Barra heard from Michigan's congressional delegation and Ohio's two senators who want the automaker to reconsider its plans to idle four U.S. plants next year.

GM plans to idle five plants in North America next year, putting the jobs of 6,300 assembly line workers in jeopardy in a restructuring plan designed to save the Detroit automaker $6 billion by 2020. Among the affected GM plants is Detroit-Hamtramck Assembly which employs 1,350 union workers and one of only two vehicle assembly plants left in Detroit.

Foreign and domestic automakers are under increasing pressure from President Trump to boost production of cars, trucks and SUVs in the United States — even as his administration wages a costly trade war with China, Canada, Mexico and the European Union that is raising steel prices and threatening tariffs on imported vehicles. The tariffs make producing cars in the U.S. more costly for GM and FCA.

resource from: The Detroit News

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