Published: Tue, January 10, 2017
Economy | By Melissa Porter

Fiat Investing $1B in 2 US States

Once the modernization is complete, the Warren plant may also begin producing the Ram heavy-duty truck, which is now being made in Mexico.

FCA US said the announcement is the second phase of an industrialization plan announced last January, which called for the realignment of USA manufacturing operations in response to shifting demands for trucks and SUVs.

The news come the eve of the Detroit auto show.

United Automobile Workers President Dennis Williams said in a statement that the union is happy with Fiat Chrysler's decision.

Fiat Chrysler Automobiles said it plans to invest more than $1bn in the modernisation of two plants in the US Midwest, creating 2,000 jobs in the process.

Trump, a Republican, also criticized Toyota Motor Corp (7203.T) last week for shifting production of its Corolla from Canada to Mexico.

But GM said that all Cruze sedans were built in the US and only a "small number" of Cruze hatchbacks built in Mexico are sold in the U.S. (The) restated their buy rating on shares of Fiat Chrysler Automobiles N.V. (NYSE:FCAU) in a research report sent to investors on Sunday. In 2015 contract negotiations, the UAW pushed Fiat Chrysler to invest in American manufacturing, and got promises on that front.

Trump, who will be inaugurated on January 20, has talked about rolling back environmental regulations, and supporting corporate tax cuts - moves auto makers would welcome.

A week ago, Ford rejected arrangements to fabricate a $1.6 billion plant in Mexico and put $700 million in an industrial facility in MI. Because of low demand, it will shift the Focus to an existing Mexican factory, rather than to a new factory as was announced in April.

"We do not make our investment decisions based on administrative cycles".

FCA said in a statement that the production plants in MI and OH will focus on ramping up production of its Jeep range, with the modernisation expected to be finished by 2020.

Sunday's announcement brings to $9.6 billion the amount the company has invested in USA production facilities since 2009, the company said. "Our business is really an 8, 12, 14-year horizon when we look at investments", Hinrich Woebcken, the company's North America chief, tells Reuters. Jeep also hopes that the increased production capacity will help it expand into other global markets. "We keep on reinforcing the a worldwide assembling center point" for SUVs and pickup trucks, he included.

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