City of Detroit, FCA sign Memorandum of Understanding giving City 60 days to land new assembly plant, 5,000 new jobs
If parties proceed to development agreement, FCA expected to invest $2.5 Billion to build new auto assembly plant and retool existing plant in Detroit with zero displacement of residents
- Total investment at Mack Avenue Engine and Jefferson North plants would be single largest FCA has made in the U.S. since Great Recession
- Mack Avenue Engine Complex would be converted into new vehicle assembly plant
- Mack project would be first new assembly plant built in Detroit in almost three decades, first in Michigan in 13 years and first in U.S. since 2011
- New plant, along with Jefferson North, would firmly establish FCA as the only auto company with a significant manufacturing presence in Detroit
- Deal contingent on City delivering proposed site to FCA within 60 days and negotiation of development incentives
DETROIT – The City of Detroit today signed a memorandum of understanding (MOU) with Fiat Chrysler Automobiles (FCA) that could see the Company making the single largest investment in its U.S. manufacturing operations since 2009 to construct an all-new assembly plant within the city limits and retool an existing plant, creating nearly 5,000 new jobs.
Subject to the execution of the terms outlined in the MOU, the city expects FCA to invest $1.6 billion to convert the current Mack Avenue Engine Complex into a vehicle assembly plant for production of the next generation Jeep Grand Cherokee and an all-new 3-row full-size SUV along with plug-in hybrid (PHEV) models. Construction of the new facility could begin in the second quarter of 2019. In addition, the Company would invest $900 million to modernize its Jefferson North plant. The total investment is expected to add nearly 5,000 new jobs in the city.
“This opportunity is unlike anything we have seen in decades, and it’s going to be crucial that we come together in the interest of our city and our residents over the next 60 days to bring nearly 5,000 new good-paying jobs to this neighborhood,” said Mayor Mike Duggan. “Over the next two months, we will be out in the neighborhoods every day working with the residents to make this happen for our city. Most importantly, we’re going to bring these 5,000 jobs to Detroit without displacing a single resident.”
As part of the MOU, the city of Detroit will demonstrate within 60 days that it has obtained binding agreements to deliver title to the Mack site within the timeframe and conditions required to construct a new assembly plant and other facilities. The city will also begin the Community Benefits Ordinance process in the neighborhood to proactively engage with the community, identify community benefits and address potential development impacts. The community benefits and impacts would be included in a final development agreement to be approved by the Detroit City Council.
It is also expected that the city and the state would be able to deliver an incentive package that would support the business case for this investment.
“This is incredible news for Michigan’s economy, our families, and the future of our state,” said Gov. Gretchen Whitmer. “Today’s announcement signals the strong bet FCA is making on our talent and manufacturing heritage that will continue to cement Michigan’s status as the home of automotive innovation for generations to come. We need to keep our foot on the gas as we work to build a Michigan where businesses can find the resources and talent to thrive in the state. Nearly 6,500 jobs, $4.5 billion in investment in Michigan and the first new automotive assembly plant in Detroit in 30 years provides a compelling testament that we are on the right path forward.”
Should FCA move forward with the investment, the Mack Avenue complex would be the first new assembly plant to be built in the city of Detroit in nearly three decades. The FCA Jefferson North facility was the last new assembly plant built in the city in 1991. When complete, Mack would join Jefferson North as the only automotive assembly plants to be located completely within the city limits of a major U.S. city. The plant would also be the first built in Michigan since 2006 and the first built in the nation since 2011.
“FCA wants to thank Mayor Duggan, Governor Whitmer, Wayne County Executive Evans, Detroit City Council and the Detroit Economic Growth Corporation for their support of a project that will bring an all-new state-of-the-art assembly plant and nearly 5,000 high paying jobs to Detroit and Wayne County,” said Mark Stewart, Chief Operating Officer, North America, and Fiat Chrysler Automobiles N.V. (FCA). “Also, we look forward to working with the Detroit City Council to implement initiatives that will further benefit the city’s residents.
“We chose the city of Detroit for this investment based on the quality of its workforce and the quality of the products they produce, like the award-winning Jeep® Grand Cherokee,” said Stewart. “This new facility, along with investment at Jefferson North, will help us further strengthen and grow our U.S. manufacturing footprint to satisfy the global demand for Jeep vehicles.”
If a decision is made to proceed, the award-winning Pentastar engine family – including the 3.0- , 3.2- and 3.6-liter – currently produced at Mack would be relocated to the Dundee Engine Plant.
UAW Vice President Cindy Estrada also praised the announcement for its job creating potential.
“Today’s investment is a testament to the great quality products that our UAW members continue to build,” said Estrada. “It is especially exciting because these are good union jobs that have been achieved through collective bargaining. We now look forward to working with the City and other community leaders on a community benefits agreement that reimagines our city and empowers our citizens to create sustainable communities with long-term viability.”
”Today’s announcement of a multibillion dollar investment at Mack and Jefferson North, along with the creation of nearly 5,000 new jobs, demonstrates that FCA emerged from the bankruptcy era poised to be a leader in the budding mobility sector,” said Wayne County Executive Warren C. Evans. “Detroit and Wayne County have rebounded on a similar trajectory as FCA so this partnership is a natural fit. I applaud FCA’s commitment to Detroit and Wayne County, and their continued investment in the city amid the automotive industry’s daunting pace of change."
The Detroit Economic Growth Corporation will assist in bringing 5,000 new jobs to Detroit without displacing any residents.
“The DEGC is excited about the many jobs this project could bring to Detroit,” said Kevin Johnson, president and CEO, Detroit Economic Growth Corporation. “Our team is working with the City on infrastructure improvements as well as assisting with the real estate needs of the project to improve Detroit’s position for consideration.”