By on May 4, 2019

Image: FCA

Wrangling between Fiat Chrysler Automobiles, the city of Detroit, and a prolific landowner reached an end on Friday, with all three parties signing deals designed to bring more Jeeps to the city.

As part of a $4.5 plant investment strategy announced in February, FCA wants to convert its Mack Avenue Engine Complex into an automobile assembly plant, earmarked for the next-generation Jeep Grand Cherokee and a second, larger model. The adjacent Jefferson North plant, which currently builds Grand Cherokees and Dodge Durangos, won’t see its product roster change, though it will see cash for expansion and interior upgrades.

Once unionized FCA workers get first crack at the 4,950 jobs, remaining positions will go to Detroit residents.

While FCA stated in February that it hoped to start construction on the Mack Avenue facility in the second quarter of this year, the project hinged on acquiring 215 acres of land — including 82.2 acres held by a Moroun-owned company.

From the Detroit News:

The most complicated piece of the deal involved acquiring 82.2 acres of land from Moroun-owned Crown Enterprises Inc. The city struck a deal with the Morouns to pay $43.5 million and swap 117 acres of land in return for the parcel at 12141 Charlevoix St. The Moroun property was by far the most expensive, as the city acquired the other 132 acres for $4.6 million.

The 117 acres included in the land swap is scattered throughout the city in about 10 different locations, Mayor Mike Duggan said, but did not immediately provide details. Most of the parcels were pieces of land adjacent to Moroun-owned properties.

As of Friday, 208 of the 2015 acres were in FCA’s hands, though Duggan said the remaining seven acres (owned by rail company Conrail) is expected to change hands “shortly.”

For its part, FCA agreed pony up $35 million to fund a raft of community benefits, the Detroit Free Press reports, including “$19 million for workforce training and education, with millions more to build a buffer wall around the new plant and to demolish or renovate homes in the area.”

 

Late CEO Sergio Marchionne saw the Jeep brand as FCA’s golden ticket, and that outlook haven’t changed under successor Mike Manley. Once FCA moves Pentastar engine production out of Mack Avenue, work begins to ready the facility for next-generation Grand Cherokee production. Joining the revamped model is “an all-new three-row full-size Jeep SUV and plug-in hybrid (PHEV) models,” the automaker claims.

It’s assumed this new Jeep is an extended version of the new Grand Cherokee; at the very least, it borrows the model’s platform and numerous other components, but not its name. We’ll see production start on this model first, with the new entry appearing by the end of 2020. Assembly begins on the next-gen Grand Cherokee in the first half of 2021.

Elsewhere in Michigan, FCA has announced the necessary cash to bring the long-promised Jeep Wagoneer and Grand Wagoneer to fruition. The automaker bumped its previous commitment to Warren Truck to $1.5 billion in February, ensuring that the Wagoneer and Grand Wagoneer, plus their hybrid variants, will see production in early 2021.

With two body-on-frame Jeeps now muscling into Warren, production of the Ram Heavy Duty line, initially planned for that facility, pulled a U-turn and headed back to Mexico.

[Images: Fiat Chrysler Automobiles]

Get the latest TTAC e-Newsletter!

Recommended

26 Comments on “With Land Deals Wrapped Up, Fiat Chrysler Moves Ahead With Jeep Product Bonanza...”


  • avatar
    NoID

    I’m kinda bummed that the Moroun family is going to profit from this, but it’s still a net positive.

  • avatar
    EBFlex

    “As part of a $4.5 plant investment strategy announced in February”

    Dang. Imagine what they could do with 9 bucks.

  • avatar
    Lorenzo

    Is picking on typos the best we “best and brightest” can do today? How about asking how moving Ram back to Mexico will play at 1600 Pennsylvania Ave., or what’s going to happen with the pentastar engine production, now that Mack engine is going to be an assembly plant? Are there any new engines on the drawing boards at FCA, like inline sixes for the full size Jeeps?

    • 0 avatar
      EBFlex

      Yes. Silly us for expecting proper proofreading on a professional automotive news site.

      How dare we!

    • 0 avatar
      Steve203

      “…what’s going to happen with the pentastar engine production, now that Mack engine is going to be an assembly plant? ”

      As part of the investment package FCA announced in February, $119M goes to move the Pentastar line from Mack 1 to Dundee Engine. That news was cheered in Dundee as the Tigershark engine that plant produces appears to be on the way out, replaced by new turbocharged engines.

  • avatar
    FThorn

    Nice to see/hear this. Lots of family members have and still work there. One uncle had 61 years seniority when he retired. Presently an offspring is engineer there.

  • avatar
    Steve203

    Great news for Detroit, tho it came at a steep price.

    A couple things worry me, but it will be a couple years before we know the answer.

    -with the Wagoneer starting, finally, in 21, will it cannibalize the high end of the market for Grand Cherokees, rendering Mack Ave Assembly redundant?

    -Figuring the next gen Grand Cherokee will be more expensive that the existing generation, and the three row a step more expensive than that, then the Wagoneer a step higher priced than that, and the Grand Wagoneer another step more expensive, just how deep is the market at those price points?

    I started playing around with the configurator on the Jeep site today. A top trim Grand Cherokee Trackhawk, with the leather wrapped interior, premium sound, rear seat DVD player and the panoramic sunroof, was less than a Benjamin under $100,000. Add either the towing package, or the black alloy wheels, and the price cracks 6 figures. Then start figuring a few thousand more for the 3 row, a few more for a Waggy, a few more for a Grand Waggy, and I bet a Grand Waggy will easily blow past $120,000.

    Going through the Cadillac configurator, I can get an Escalade ESV AWD Platinum over $105K, without adding all the little accessories with price tags of only 3 figures. Who is going to pay well over the price of an Escalade for a Jeep?

    But Mike Manley says that $100K+ price point is attractive because there isn’t much competition and it’s an attractive “margin opportunity”. Maybe there isn’t much competition, because there isn’t much demand at that level.

    • 0 avatar
      James Charles

      Bad news for Illinois.

    • 0 avatar
      jack4x

      Why would you expect a Grand Wagoneer to cost $30,000 more than a Trackhawk? You can get all the interior stuff in a JGC without the 700 hp for tens of thousands less. That should be the basis of your comparison, not a special performance edition.

      • 0 avatar
        Steve203

        “Why would you expect a Grand Wagoneer to cost $30,000 more than a Trackhawk? You can get all the interior stuff in a JGC without the 700 hp for tens of thousands less. ”

        As suggested before, my take is the big three are all about average transaction price and gross margin per vehicle. FCA makes it possible to push the price of a 5 passenger Grand Cherokee to $100K because they see potential for people actually buying cars like that. The 3 row version of the Grand Chrrokee, being bigger, *must* be priced higher. The Wagoneer *must* be priced higher than the 3 row GC, because it’s bigger. The Grand Wagoneeer *must* be priced even higher, because it’s “Grand”. This is the Sloan “ladder”, with the wrinkle that, while adding ever more expensive models at the top, the company simultaneously eliminates the cheaper models on the bottom of the ladder.

        • 0 avatar
          jack4x

          By this logic, the following wouldn’t exist:

          Base E-class, because the C63 AMG costs more.
          Base F150, because a loaded Ranger costs more.
          Base Corvette, because the Camaro ZL1 costs more.
          Base Tahoe, because a loaded Traverse costs more.

          Ad nauseum.

          The Trackhawk is a special edition vehicle that is not reflective of the pricing that a mass market 3 row Jeep can command. Just because it costs $100K doesn’t mean that there are lines of people jumping to pay $120,000 for a Wagoneer that may be bigger, but will likely come with a 5.7L Hemi rather than a 700 hp monster.

          A V8 4×4 Grand Cherokee opens around $40K. A Tahoe starts in the low $50s, as does an Expedition. These will be the vehicles cross shopped against a 3 row Jeep, not an Escalade. Saying a Wagoneer will start higher than a Trackhawk, which is double the price of more direct competitors, is silly in the extreme.

    • 0 avatar
      rudiger

      “Who is going to pay well over the price of an Escalade for a Jeep?”

      Lots of people. The vehicle largely credited with starting the luxury SUV market was the 1966 Kaiser-Jeep Super Wagoneer. Ever since, it’s been widely viewed as the vehicle of choice for gentile, New England country gentlemen. That’s a lot of cache, matched only by stuff like the Toyota Land Cruiser or Range Rover.

      The Escalade, OTOH, is more the province of gold-chained, urban rappers.

      • 0 avatar
        ravenuer

        A lot has changed in 53 years. Escalades are not “gold-chained rappers” anymore. Most of them I see now are suburban mommy-mobiles.

        So, I disagree, lots of people will not be lining up for $100k Jeeps.

  • avatar
    James Charles

    FCA just announced 1470 jobs are lost in Illinois, a whole shift at FCA’s Grand Cherokee plant due to a fall in sales.

    The Grand has earnt FCA a good deal od money in exports, even with the famous Chrysler hit and miss quality issues.

    What gave the Grand its “potential” and sales was its size, fantastic German chassis and V6 diesel option.

    Somehow I’m worried Jeep will not produce the next Grand as grand.

    • 0 avatar
      Jerome10

      I didn’t hear about job losses in Illinois.

      However there, to my knowledge, is no Grand Cherokee production outside of Jefferson North Assembly in Detroit.

      Belvedere in Illinois is Cherokee production. Perhaps Compass as well? Not 100% sure. But I’d be surprised to hear those are struggling in this all crossover all the time market.

      With that said Illinois is in deep doo when it comes to any business wanting to to business. With their budget mess and the solution nearly always seeming to be some version of more new tax revenue, I couldn’t blame FCA or anyone else for pulling investment. I don’t have any I’ll wishes towards the people of Illinois but they absolutely must bite the biker and get the mess under control ASAP. People and companies seem to be wanting to go ANYWHERE else.

      • 0 avatar
        James Charles

        Jerome,
        I think its my bad. I read an article this morning and got my wires crossed.

      • 0 avatar
        Steve203

        “I didn’t hear about job losses in Illinois.

        However there, to my knowledge, is no Grand Cherokee production outside of Jefferson North Assembly in Detroit.”

        The report is about Belvidere Assembly in Illinois, which makes the non-grand Cherokee. Non-grand Cherokee sales have been soft this year, down 13% in April, down 5% year to date. So, they have cut the third shift.

        Being an optimist, I would suggest that FCA use the capacity that is now available at Belvidere to broaden the non-grand Cherokee with the 3 row version that they build in China as the “Grand Commander”, but Mike Manley doesn’t appear to have my phone number.

        Actually, adding the 3 row version would solve their model naming conundrum, call the three row non-grand Cherokee, the Commander, then the upcoming 3 row version of the Grand Cherokee would be the Grand Commander.

  • avatar
    Tele Vision

    Crumbling infrastructure finally pays off ( for someone )! Honestly, how bad are the roads there that a mere SUV won’t cut it anymore? FCA might be relying on the historical precedent of Jeep, though: my friend’s ‘Jeep’ hurls itself into Park when some tall grass is sensed, she says.

  • avatar
    rudiger

    Funny how FCA’s fortunes are riding so much on Jeep/Ram. In fact, can anyone imagine a world where FCA eventually overtakes GM and Ford, simply because of Jeep and Ram? I can.

    • 0 avatar
      EBFlex

      Show me another domestic manufacturer who’s fortunes are not riding on SUVs and pickup trucks.

      • 0 avatar
        golden2husky

        Anybody see a problem with that? While one cannot fault a manufacturer from going where the sales are, such a one basket approach has its pitfalls. If we take a time trip back to the early 1970s when a fuel crunch jacked up the price and availability of gas, we see a replay being set up. Detroit had few offerings that were geared to the new efficiency-minded consumers. Those few fuel-efficient models that they did have sold well even though they were pretty poor vehicles. The door was opened for the imports. What will happen now should (let’s be real – when) the price of gas rises and Detroit again finds itself in a place where the vast majority of the product line is no longer fashionable?

        • 0 avatar
          Steve203

          “Anybody see a problem with that? While one cannot fault a manufacturer from going where the sales are, such a one basket approach has its pitfalls.”

          An even better comparison would be 1958. Big three models were becoming larger and more garish every year. The economy went a bit soft in 58, people started looking for a lower priced alternative, and discovered Rambler. By 61, Rambler had replaced Plymouth as the 3rd best selling brand in the US. The big three were forced to introduce compact models to compete because Rambler was eating their lunch.

          On this go around, the big three still make small models, but they are all CUVs and priced $3,000 to $5,000 more than the passenger cars they share platforms with, while the passenger car versions are discontinued. If people start worrying about their solvency again they will refuse to pay thousands extra to sit 5″ higher. You can buy an SE trim Corolla sedan for $3,000 less than an Ecosport SE or Tran LT. A Kia Rio hatchback is $6,000 less than an Ecosport SE or Trax LT.


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • WildcatMatt: Sadly, most editors at most news organizations have been just plain laid off.
  • SCE to AUX: “Kia has done a remarkable job moving styling cues from its halo Stinger onto this compact...
  • Pete Zaitcev: RAM Ridgeline might be not a bad idea, especially if GM’s patents for Avalanche have expired, and...
  • stuki: If you are going to be stuck with a slushbox anyway, may as well make it a properly slushy one. Objectively,...
  • Dilrod: Craftsman were my first new tools, ordered them from the catalog when I was 16 as money came available. I...

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Timothy Cain, Canada
  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States