UPDATE 3-Fiat Chrysler to invest $1 bln in Michigan plant, add 2,500 jobs

From Reuters - January 11, 2018

DETROIT (Reuters) - Fiat Chrysler Automobiles (FCHA.MI) (FCAU.N) said on Thursday it will shift production of Ram heavy-duty pickup trucks from Mexico to Michigan in 2020, a move that lowers the risk to the automakers profit should President Donald Trump pull the United States out of the North American Free Trade Agreement.

Fiat Chrysler said it would create 2,500 jobs at a factory in Warren, Michigan, near Detroit and invest $1 billion in the facility. The Mexican plant will be repurposed to produce future commercial vehicles for sale global markets. Mexico has free trade agreements with numerous countries.

Fiat Chrysler Chief Executive Sergio Marchionne a year ago raised the possibility that the automaker would move production of its heavy-duty pickups to the United States, saying U.S. tax and trade policy would influence the decision.

If the United States exits NAFTA, it could mean that automakers would pay a 25 percent duty on pickup trucks assembled in Mexico and shipped to the United States. About 90 percent of the Ram heavy-duty pickups made at Fiat Chryslers Saltillo plant in Mexico are sold in the United States or Canada, company officials said.

Negotiators for the United States, Mexico and Canada are scheduled to meet later this month for another round of talks on revising NAFTA. Canadian government officials earlier this week said they are convinced that Trump intends to announce his intention to quit the agreement.

Trump has threatened to force the rollback of NAFTA, which enables the free flow of goods made in the United States, Canada and Mexico across the borders of those countries. He also has criticized automakers for moving jobs and investment in new manufacturing facilities to Mexico and prodded them to add more auto production in the United States.

On Wednesday, Toyota Motor Corp and Mazda Motor Corp announced they would build a new $1.6 billion joint venture autoassembly plant in Alabama, drawing praise from Trump.

Vice President Mike Pence praised Fiat Chryslers announcement. Manufacturing is back. Great announcement. Proof that this admins AMERICA FIRST policies are WORKING! Pence said in a Twitter posting.


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