Fiat Chrysler to add U.S. jobs as Trump puts spotlight on industry

Mon Jan 9, 2017 4:22pm EST
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By Bernie Woodall and David Shepardson

DETROIT (Reuters) - Fiat Chrysler Automobiles (FCHA.MI: Quote) (FCAU.N: Quote) said it will invest $1 billion to modernize two plants in the U.S. Midwest and create 2,000 jobs, and possibly move production of a Ram heavy-duty pickup truck to Michigan from Mexico.

FCA Chief Executive Sergio Marchionne said on Monday the decision to retool factories in Ohio and Michigan to build new Jeep sport utility vehicles, including a pickup truck, "was in the works and has been in the works for a long period of time."

But he also told reporters at the Detroit auto show that uncertainty over U.S. President-elect Donald Trump's trade and tax policies could lead auto makers to delay investments in Mexico.

"The reality is the Mexican automotive industry has now for a number of years been tooled-up to try and deal with the U.S. market. If the U.S. market were not to be there, the reasons for its existence are on the line," Marchionne said.

Trump has threatened to slap new taxes on imported vehicles and criticized automakers including Ford Motor Co (F.N: Quote), General Motors Co (GM.N: Quote) and Toyota Motor Corp (7203.T: Quote) for building vehicles in Mexico.

FCA's investment decisions were not related to Trump's recent attacks on the auto industry, according to people familiar with the company's moves. FCA had previously said it would expand truck and SUV production in the United States, though the $1 billion investment figure and creation of 2,000 jobs are new details.

A person familiar with the situation said Marchionne wanted to get out those details in case FCA encountered criticism from Trump. The person said FCA executives did not confer with Trump before making the decision.

FCA's announcement also highlighted the auto industry's keen interest in getting relief from tough fuel economy rules enacted by the outgoing Obama administration.   Continued...

A Chrysler Warren Truck Assembly sign is seen in front of the Fiat Chrysler Automobiles (FCA) plant in Warren, Michigan October 7, 2015. REUTERS/Rebecca Cook