DETROIT — Two automakers whose Detroit production plans are moving in opposite directions talked about meeting in the middle, but couldn’t reach a deal, Automotive News and affiliate Crain’s Detroit Business have learned.
Months before announcing plans to build an SUV factory on Detroit’s east side, Fiat Chrysler Automobiles approached General Motors about buying the Detroit-Hamtramck assembly plant that GM plans to idle, according to four sources with knowledge of the proposal.
If a deal had been reached, it could have secured the future of the GM plant, which remains in limbo ahead of contract negotiations this year with the UAW. It also could have allowed FCA to expand production capacity as planned without having to rely on Detroit officials to acquire more land.
GM and FCA had a “legitimate” discussion about the plant, one source said, but couldn’t reach a deal for various reasons. The exact time frame and terms of the proposal are unknown.
Two other sources said FCA’s proposal came after GM announced in late November that the 34-year-old Hamtramck plant wouldn’t be assigned a new product in 2019. GM’s cost-cutting move caused FCA to pause planning at its Mack Avenue engine plant site in Detroit to study the feasibility of building Jeep SUVs at Detroit-Hamtramck, the two sources said.
GM and FCA officials declined to comment directly on the talks. GM said in a statement that it has “received inquiries from interested parties related to our unallocated plants” and it “would consider any that are truly viable business opportunities.”
GM’s rebuff raises additional questions about whether Detroit-Hamtramck, which was building Chevrolet Volt plug-in hybrids and large cars, will idle and close. GM’s November announcement called for production to end there in June, but GM decided in February to extend production to January 2020, after September contracts expire between the UAW and Detroit automakers.
Retaining the plant gives GM a potential bargaining chip for talks with the union and lets it continue producing the Chevrolet Impala and — more importantly — the Cadillac CT6 into next year, as it evaluates options for keeping the CT6 in its U.S. lineup.
GM must contractually negotiate all plant closures with the union, which has sued the company over its plans to idle Detroit-Hamtramck and three other U.S. plants: Lordstown Assembly in Ohio and powertrain plants in Warren, Mich., and near Baltimore. GM hasn’t said it’s closing the plants, just that they have not been assigned new products.
Transferring a unionized plant from GM to FCA would have been complex but easier than going to a company with a nonunion work force such as Tesla Inc.
GM CEO Mary Barra said in January that there were talks with Tesla Inc., but “Tesla is not interested in our GM work force represented by the UAW, so really it’s a moot point.”
The future of FCA’s new assembly plant, at a site that builds engines, hinges on an April 27 deadline for Detroit to acquire 200 acres that FCA needs for new-vehicle storage, employee parking and handling delivery trucks.
Chad Livengood is a reporter for Crain's Detroit Business.