Fiat Chrysler has revealed plans to invest $1 billion (946 million euros) to modernise two plants in the US Midwest, creating 2,000 jobs.
They will build new Jeep models there and possibly move production of Ram heavy-duty pickup trucks from Mexico.
The Italian-American carmaker had long planned these changes, as the second phase of a plan made public a year ago, but the company’s boss Sergio Marchionne reportedly wanted to get the news out now to head off any potential criticism by Donald Trump.
Inevitably the president-elect put out tweets seeming to claim credit. They were the latest salvo in his Twitter attacks against General Motors, Ford and Toyota for building cars in Mexico for sale in the US.
It's finally happening – Fiat Chrysler just announced plans to invest $1BILLION in Michigan and Ohio plants, adding 2000 jobs. This after…— Donald J. Trump (@realDonaldTrump) January 9, 2017
Ford said last week that it will expand in Michigan and U.S. instead of building a BILLION dollar plant in Mexico. Thank you Ford & Fiat C!— Donald J. Trump (@realDonaldTrump) January 9, 2017
Fiat Chrysler’s investment decisions were not related to Trump’s recent attacks on Ford, GM and Toyota, people familiar with company policy had said on Sunday.
Tariffs threaten Mexican production
Chief Executive Marchionne also said on Monday that if the Trump administration sets high tariffs on vehicles made in Mexico and imported to the United States it may end production in Mexico.
“It’s possible, if the economic terms imposed by the US administration on anything that comes into the United States that, if they’re sufficiently large that it would make the production of anything in Mexico uneconomical,” said Marchionne. “We would have to withdraw. It is quite possible.”
Fuel economy and tax laws in their sights
American automakers have made it clear they are hoping Trump and the Republican controlled US Congress will help them by rolling back tough fuel economy laws designed to reduce pollution and also lowering the amount of corporation tax they pay.
General Motors Chief Executive Mary Barra on Sunday said tax reform and “streamlining regulations … are just two areas that would be extremely beneficial” for Trump to address.
Most of the major automakers in the US have substantial vehicle making operations in Mexico, as well as complex networks of parts makers that supply their factories in the US and support jobs and investment in states such as Ohio and Michigan.