“Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash. Today we have no Jobs, no Hope and no Cash. Please don’t let Kevin Bacon die.”
It’s an old joke by now, but for many auto workers in the rust belt of America, it probably hits a little too close to home.
For many years now, automotive manufacturing jobs have been steadily shifting overseas and to Mexico in pursuit of lower labour costs. However, Michigan’s auto workers may have cause to smile again as major automaker Fiat Chrysler Automobiles (FCA) has announced a new plan to reshore 2,500 jobs, investing $1 billion USD to modernize the Warren Truck Assembly Plant to produce the new Ram Heavy Duty.
Production of this truck will move from Mexico to Michigan in 2020, creating 2,500 jobs. Part of the billion dollars will be allocated to an expansion of the Jeep product line, adding the all-new Wagoneer and Grand Wagoneer vehicles. The Saltillo Truck Assembly Plant in Mexico will be repurposed for commercial vehicles sold across the globe.
Another exciting part of FCA’s plan involves a $2,000 cash bonus for 60,000 American employees. The bonus “recognizes employees for their continued commitment to the company’s success,” according to a recent release by FCA. The bonus excludes senior leadership, and comes in addition to regularly scheduled bonuses and pay increases.
The move brings FCA’s investment in US manufacturing to a total of $10 billion since 2009, and more than 25,000 jobs. FCA credits 2017’s tax reform legislation as an investment in US manufacturing.
It’s hard to ignore the PR element to these decisions by FCA. Showing commitment to American manufacturing, especially in automotive, could make Fiat Chrysler the sweetheart of “Buy American” patriots.
Luckily for those outside the Great Lake state, the purported gravy train doesn’t stop in Michigan, but also includes production shifts and investments at plants in Illinois and Ohio intended to gain capacity for Jeep and Ram vehicles. This includes a slated $350 million for the Belvidere Assembly Plant to produce the Jeep Cherokee, which moved to Toledo in 2017.
$700 million will go to the Toledo Assembly Complex for retooling in advance of the next Jeep Wrangler, and $1.5 billion will be invested in Michigan’s Sterling Heights Assembly Plant, where the Ram 1500 is built. The company also has plans for an all new Jeep truck, which will require an additional 2,000 Michiganders.
Those investments and related actions involved production shifts at three plants in Illinois, Ohio and Michigan to gain capacity for the Jeep Cherokee, Jeep Wrangler and Ram Light Duty truck, and the introduction of three new Jeep models at plants in Ohio and Michigan.
Of course, these plans are tentative, and subject to negotiation and approval by state and local entities.
The way things are going, rust belt auto workers may someday see the humour in that old joke; unless, of course, Kevin Bacon bites it too soon.
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