FCA will invest more than $1 billion to modernize a Michigan truck plant to produce the next-generation Ram Heavy Duty pickup, which will be shifted from Saltillo, Mexico, starting in 2020.
The investment at the Warren, Mich.., assembly plant follows plans detailed in January 2017 to expand the factory to build all-new Jeep Wagoneer and Grand Wagoneer SUVs.
The company said the Saltillo truck assembly plant will be repurposed to produce future commercial vehicles for global markets.
FCA said 2,500 new jobs will be created at the Michigan plant, in addition to the jobs detailed in January 2017 when FCA said it would move light-duty Ram truck output from the Warren, Mich., site to a nearby Sterling Heights, Mich., factory.
The company also plans to make a special bonus payment of $2,000 to approximately 60,000 FCA hourly and salaried employees in the U.S., excluding senior leadership.
FCA said Thursday the Michigan plant expansion and special payments were made possible in part by U.S. tax reform passed late last year that will reduce the company's corporate tax bill.
FCA Chief Executive Sergio Marchionne said a year ago the company could shift heavy-truck output from Mexico to Michigan, depending on the outcome of tax reform legislation and proposed changes to the North American Free Trade Agreement.
President Donald Trump has threatened to force the rollback of NAFTA, which enables the free flow of goods across the borders of the United States, Canada and Mexico. Trump says NAFTA has hurt U.S. manufacturing employment and has blasted domestic and foreign automakers for moving jobs and factory investment to Mexico.
Heavy duty pickups are among the most profitable vehicles produced by automakers and are sold mostly in the United States and Canada. Analysts say FCA's decision to move output of the trucks to the U.S. would also mitigate any risk of any unfavorable changes to NAFTA.
The special payment will be made in the second quarter and will be in addition to any profit sharing and salaried performance bonuses that employees are eligible for in 2018, FCA said. The one-time bonus will be paid to all eligible employees at FCA's automotive and components operations in the U.S.
“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,” Marchionne said in a statement.
