Thursday, 22 February 2018

FCA plan to produce more in Detroit has ripples


Ram heavy-duty pickups move down the line in Mexico. Supplier investment likely will accompany the move to the U.S.

FCA US’ plan to spend $1 billion to move production of its heavy-duty Ram pickup out of Mexico has big economic implications for Detroit.

But it’s unclear how far the project’s ripples will spread — or when.

Suppliers are typically the biggest generators of jobs in a major plant project, but FCA already has a large number of truck suppliers in the Detroit area, says Mike Robinet, managing director of IHS Markit’s automotive global advisory practice.

Marchionne: ’08 move to Mexico was “an error.”

Last month, the automaker revealed that in 2020 it will move heavy-duty Ram production from Saltillo, Mexico to its Warren, Mich., assembly plant north of Detroit. In discussing the plan with reporters, FCA CEO Sergio Marchionne called moving the pickup to Mexico in 2008 “an error.”

The Warren plant already is scheduled for a major capital project, handing off production of the light-duty Ram to a nearby Detroit-area assembly plant with increased capacity, while Warren will be repurposed to build high-end, body-on-frame Jeep SUVs. Adding the heavy-duty Ram will require the automaker to hire 2,500 workers on top of the work force needed for the Jeep plan, FCA said last month.

But unclear is how much additional spending or how many more Detroit-area jobs will be created by suppliers to the pickup.

Many heavy-duty Ram suppliers are also likely to provide parts for the light-duty Ram 1500, which has been moved 10 miles north to FCA’s Sterling Heights, Mich., assembly plant.

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