Fiat Chrysler to Bring Heavy Duty Pickup Production Back to U.S., Shower Workers With Cash

There’s good news this morning for Fiat Chrysler worker in the United States, and it’s also good news for members of the Trump administration.

The automaker has announced plans to sink another $1 billion into its Warren Truck Assembly plant and bring production of its Ram Heavy Duty models to Michigan from Saltillo, Mexico. At the same time, some 60,000 hourly and salaried workers in the U.S. can expect a $2,000 bonus (paid in the second quarter of 2018) in recognition of “their continued efforts towards the success of the company.” The move also means 2,500 previously unannounced jobs for Michigan.

What’s behind all of this sudden goodwill? Recent changes to the country’s tax landscape, FCA claims.

“It is only proper that our employees share in the savings generated by tax reform and that we openly acknowledge the resulting improvement in the U.S. business environment by investing in our industrial footprint accordingly,” said CEO Sergio Marchionne in a statement.

So, how does this production shuffle play out, and what’s the backstory here?

In late 2016, FCA delayed a planned revamp of its HD truck models, leaving Saltillo in charge of building older models while the automaker retooled its Sterling Heights plant (at a cost of $1.5 billion) for the next-generation Ram 1500. The old 1500, produced at Warren and Saltillo, will soldier on in dwindling numbers for a couple of years. HD and chassis cab models have hailed from Mexico since the late 2000s.

The HD switcheroo comes in 2020, with the delayed next-gen model setting up shop in Warren. Slated for production alongside the trucks is a reborn Jeep Wagoneer and Grand Wagoneer. The retooling needed for those SUVs, announced a year ago, carries a $1 billion price tag (part of which covers costs for the Jeep Scrambler pickup, bound for Toledo). Meanwhile, Saltillo will be “repurposed to produce future commercial vehicles for global distribution.”

There’s no word on what form those vehicles will take.

Worker bonuses and tax changes aside, a glance at the company’s timeline of decisions suggests HD production was bound for the U.S., anyway. It fits with a trend among Detroit Three automakers — increasingly, we’ve seen high-margin vehicle production come stateside while lower-profit models are offloaded to other jurisdictions.

The announcement of the Ram HD’s redesign delay came in early December 2016, shortly after the election of a president determined to scrap or rewrite the North American Free Trade Agreement. The possibility of import tariffs remains a real concern. In its January 2017 funding announcement, FCA said Warren Truck would “have the flexibility to also produce the Ram heavy duty truck.”

It certainly appears as if FCA’s seeking to insulate itself from any surprises. Regardless, the move of HD trucks to Warren — still subject to negotiation and final approval of state and local incentives — is undoubtedly good news for American workers.

[Image: Fiat Chrysler Automobiles]