FCA’s Detroit plant project hinges on land deal

March 4, 2019

Automotive News

Vince Bond Jr. 

DETROIT — Nearly 10 years after Chrysler collapsed into bankruptcy, its owner is promising to bring a manufacturing surge to the Motor City that would provide a shot in the arm for the UAW.

If completed as envisioned, the $4.5 billion investment Fiat Chrysler Automobiles announced last week would create a truck-building empire on Detroit’s east side and add 6,500 jobs in the region. The most impactful piece would be a revamp of FCA’s Mack Avenue Engine Complex — including the idled Mack II engine plant — into a hub for the next-generation Jeep Grand Cherokee and a new three-row, full-size Jeep SUV.
But while city, UAW and FCA officials celebrated the prospect of another assembly plant within city limits, there’s one catch: It’s not a done deal yet.

To secure the Mack project, the city has less than two months to acquire about 200 acres of land from various owners.

Asked what would happen if the city can’t secure the extra land, FCA said only: “We have full confidence in the city of Detroit.”

If the city delivers on the land, and secures the 3,850 jobs that come with the Mack project, it could have big implications for labor talks with the UAW beginning this summer. For one thing, FCA would come to the bargaining table on the verge of surpassing GM’s hourly worker count.

According to profit-sharing announcements from the automakers, GM has 46,500 U.S. hourly workers compared with FCA’s 44,000. Between the new Jeep plant and planned GM layoffs, FCA is nearly certain to pass GM in the number of U.S. factory workers. GM would end up with the smallest hourly work force among the Detroit 3.

It could also help ease tensions between the rank and file and UAW leadership, said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research. Relations were frayed by a scandal involving union leaders accepting bribes from FCA officials in exchange for labor peace.

Yet she wonders how much credit UAW leaders will get from members, saying that some workers could view the investments as inevitable responses to product and political demands that didn’t require much of a lift from the union brass.

Dziczek said FCA will be buoyed by going into UAW talks with major investment goals as GM did in 2015. “We don’t have language in the contracts that guarantee job security anymore,” she said. “You get a good product that sells on the market. That’s your job security.”

Bucking the trend

The investment makes FCA stand out in the industry as U.S. sales are plateauing, some automakers are scaling back capacity and layoffs are displacing workers at Ford and GM. Even FCA announced last week that it was laying off 1,400 workers at its Belvidere, Ill., plant that builds the Jeep Cherokee.

By bucking the trend, Dziczek said, FCA’s investment in U.S. manufacturing will please the government, even though it isn’t closing any factories outside the U.S. Indeed, as a result of the investment, FCA said, production of the new Ram Heavy Duty will remain in Saltillo, Mexico, instead of moving to the Warren Truck plant in Michigan.

President Donald Trump was quick to praise FCA’s plan, thanking the company on Twitter and saying the U.S. is “where the action is.” Overall, the plan is expected to add around 6,500 jobs in southeast Michigan, with nearly 5,000 of them in Detroit and the rest at suburban assembly and part plants.

The Mack site would be “the first new assembly plant in Detroit in almost three decades,” said Mark Stewart, FCA’s recently hired COO for North America, during the announcement last week. “We anticipate starting construction in the second quarter. Our goal is to get the first three-row new Jeeps off the line before the end of 2020.”

The 4,950 jobs created at the Detroit plants would come with an expected average wage of approximately $58,000 a year, according to the city’s memorandum of understanding with FCA.

Power of persuasion

Detroit Mayor Mike Duggan said the city will have to use the power of “persuasion” with voluntary buyouts to gather the land.

Sandy Baruah, CEO of the Detroit Regional Chamber, pointed to projects by suppliers Flex-N-Gate and Sakhti Automotive in recent years as examples of Duggan engaging the auto world to bring jobs to the city.

Duggan “does not use hope as a strategy,” Baruah told Automotive News. “He’s been working this deal for quite some time. This is not something that FCA dropped in his lap the other day.”

Duggan and administration officials have had early discussions with all of the property owners about selling, but no transactions have taken place, Crain’s Detroit Business, a sibling publication of Automotive News, reported.

“I think most people realize this is a once-in-a-generational chance to change the economic fortunes of thousands of Detroiters,” Duggan said during last week’s announcement. “If somebody refuses to sell, we have no legal means to make them. That’s why this is such an enormous leap of faith on the part of FCA to trust us that we’re going to get this done.”

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Destination Detroit’s Economic Development Partners Attract $2.03 Billion, 3,271 New Jobs to Southeast Michigan in Third Quarter of 2016

DD_Social Media Numbers_3.28.17_webDuring the third quarter of 2016, Destination Detroit’s economic development partners directly assisted with the creation of 3,271 new jobs and $2.03 billion in new investment.

The bulk of the new investment during this time was generated by Fiat Chrysler Automobiles (FCA US), who in July revealed plans to spend $1.49 billion retooling its Sterling Heights Assembly Plant to accommodate production of the next-generation Ram 1500 pickup truck.

FCA’s announcement isn’t the only recent investment of $1 billion or more for Macomb County. In 2015, General Motors Co. made the decision to commit $1 billion into its historic Warren Technical Center and

Learn more about a few of the projects that helped drive economic growth in the Detroit region from July through September of 2016:

Quarter 3 Project Highlights

Company: FCA US LLC

Location: Sterling Heights

Partner Lead: Macomb County Department of Planning and Economic Development

New Jobs: 700

New Investment: $1.49 billion

Description: FCA will move production of its next-generation Ram 1500 pickup truck to the Sterling Heights Assembly Plant, committing $1.49 billion to modernize the facility. FCA’s decision, which is now the largest one-time corporate investment in the city of Sterling Height’s history, creates 700 new jobs and secures the future of a plant that had been previously listed for closure during the company’s 2009 bankruptcy. FCA chose Sterling Heights over a number of competing locations across North America.

Company: Fuyao Glass

Location: Plymouth

Partner Lead: Wayne County Department of Economic Development

New Jobs: 533 new jobs, 400 jobs retained

New Investment: $66 million

Description: Fuyao Glass, the world’s largest automotive glass manufacturer, will significantly expand its presence in the Detroit region, investing $66 million in a new logistics and factory facility in Plymouth. Fuyao originally entered the North American market in 2008 with an establishment in Oakland County’s Orion Township. The latest move will consolidate existing operations into one location, but add an additional 533 jobs for a new business unit that will finish the glass before shipping to automakers.

Company: iSource

Location: Flint

Partner Lead: Flint and Genesee Chamber of Commerce

New Jobs: 45 initial, up to 100 over the next two years

New Investment: $625,000

Description: iSource is a rapidly growing software company that developed a cloud-based web-to-print service. After reaching capacity at its Fenton headquarters, iSource made the decision to relocate to the recently renovated, historic Dryden Building in downtown Flint. The move will initially create 45 new jobs, with the possibility of reaching 100 total personnel over the next two years. The plans are part of the company’s larger vision to create a “tech town” in Flint and play a significant part of the city’s revitalization.

Company: Strongback Properties

Location: Adrian

Partner Lead: Lenawee Now

New Jobs: 0

New Investment: $4.35 million

Description: Strongback Properties is a Michigan-based real estate development firm founded by business partners Steve Hickman and Doug Kapnick. The company is currently renovating three historic, yet blighted buildings in downtown Adrian. Once completed, the project will add 17 new apartments as well as office and retail space to one of the city’s main corridors.

About Destination Detroit

Representing the 11 counties that make up Southeastern Michigan, Destination Detroit is a collaborative business attraction effort led by the Detroit Regional Chamber in partnership with the region’s principal economic development agencies. Each quarter, Destination Detroit aggregates and promotes the investment and job creation results for projects directly impacted by these organizations.

Michigan Leading the Mobility Revolution

By James Amend 

Automakers are conducting an unprecedented technology harvest, scouring the globe for the latest breakthroughs to prepare their organizations for a revolution in personal mobility.

And make no mistake, industry leaders say, the day when autonomous cars and trucks begin plying the nation’s roadways — or when people choose to borrow, share or rent a vehicle instead of owning it — is just around the corner.

“In the history of technology, we have been surprised often by the speed of which it matures and autonomous vehicles will be another example of that,” said Ken Washington, vice president of research and advanced engineering at Ford Motor Co. “What I don’t want to do is leave the impression that getting there is going to be easy, because it won’t be.”

To meet this unprecedented change, the industry must break away from a century old business model. Instead of designing and engineering new technologies almost entirely in-house, automakers will have to collaborate more closely with traditional suppliers, forge partnerships outside of automotive and build entirely new units within their companies focused on future modes of transportation.

Ford has already begun real-world testing of autonomous vehicles with exercises in California, Arizona and Michigan. The company expects by the next decade it will be selling cars and trucks that operate without a steering wheel, throttle or brake pedal.

“I am very optimistic that the (Ford) target of 2021 is very achievable and we’re committed to it,” Washington added.

The real-world testing is part of Ford Smart Mobility, a plan the 113-year-old automaker expects will put it on the leading edge of autonomous vehicle technology, connectivity, mobility, customer experience, and data and analytics. The Ford plan includes strategic investments in technology companies — City Maps, Nirenberg Neuroscience LLC, SAIPS and Velodyne — meant to deepen the automaker’s expertise in emerging technologies, such as computer vision, machine learning, artificial intelligence and high-resolution 3-D mapping.

Much of Ford’s work on future mobility falls under the direction of Smart Mobility CEO Rajendra “Raj” Rao. A transformation agent, Rao previously built out the digital prowess of companies such as IGATE Capital, Brunswick Corp. and 3M. Rao underscores the gravity of future mobility work at Ford by calling the opportunity to lead Smart Mobility a “culmination” of his career.

Other automakers are taking similar steps. General Motors has partnered with a pair of San Francisco-based companies, Lyft and Cruise Automation, to speed development of its ride-sharing and autonomous driving initiatives. The company also launched its own personal mobility service, Maven, in January.

FCA US LLC has leapt into autonomous research through a partnership with Google, arguably one of the world’s leading technology companies. The unlikely duo has cloaked their work in secrecy for competitive reasons, but it reportedly consists of outfitting 100 Chrysler Pacifica minivans with Google’s autonomous vehicle technology.

“What develops from here, we’ll see,” FCA CEO Sergio Marchionne told journalists in Windsor recently.

Volkswagen, which is remaking its business after a damaging emissions-cheating scandal, hired Johann Jungwirth away from Apple to lead its digitization efforts as the German automaker stretches into autonomous vehicles and the mobility services of ride-hailing and car-sharing.

Jungwirth recently disclosed plans for a standalone brand at VW entirely devoted to urban mobility services.

Toyota has put its autonomous vehicle development under the auspices of Gill Pratt, a robotics genius who previously led the U.S. Defense Advanced Research Projects Agency centered on driverless cars and machine learning. Pratt is CEO of the Toyota Research Institute, an Ann Arbor hub for the Japanese automaker tasked with developing artificial intelligence systems, so its cars can someday learn the intricacies of driving.

But Pratt said even an engineering giant such as Toyota must go outside its organization to achieve unquestionably safe driverless cars.

“Coopetition is actually the goal here,” he said. “Our great hope is for constructive competition and also collaboration between all the car manufacturers, the IT companies, different governments and hardware manufacturers.”

James Amend is a senior editor at WardsAuto in Southfield.

Michigan becomes first state in nation to develop comprehensive regulations for autonomous vehicle research, development, use

In a move that will position the state to become the epicenter for driverless vehicle technology, Gov. Rick Snyder today signed legislation into law making Michigan the first state in the nation to establish comprehensive regulations for the testing, use and eventual sale of autonomous vehicle technology.

“Michigan is the global center for automotive technology and development, having transformed the way the world moves for more than 100 years,” Snyder said. “By establishing guidelines and standards for self-driving vehicles, we’re continuing that tradition of excellence in a way that protects the public’s safety while at the same time allows the mobility industry to grow without overly burdensome regulations.”

The new law, signed by Snyder at 11 a.m. at the Automotive Hall of Fame in Dearborn, more clearly defines the circumstances of how self-driving vehicles can be legally used on public roadways. The new law also allows:
• Testing of vehicles without steering wheels, pedals or needed human control;
• Automotive and technology companies to operate self-driving vehicle ride-sharing services; and
• Self-driving vehicles to be sold for public use once the technology has been tested and certified.

In addition, the new law will establish the Michigan Council on Future Mobility, an arm of the Michigan Department of Transportation that will recommend policies to set industry standards. It also will regulate connected vehicle networks and how traffic data, such as vehicle crashes, will be collected and shared.

“This legislation keeps Michigan at the forefront of a renaissance in automotive technology,” said Kirk T. Steudle, director of the Michigan Department of Transportation. “The law helps government further support the industry while not getting in the way.”

The forward-thinking legislation is the result of public and private collaborative efforts to ensure any new policy would not impact the autonomous vehicle industry’s ability to evolve safely and in an atmosphere that encourages increased research and investment. The partners who helped inform the final legislation include Fiat Chrysler Automobiles (FCA), U.S., Ford Motor Co., General Motors, Toyota Motor Corp. and Google Inc., as well as ride-hailing companies Uber and Lyft.

Michigan is a national leader in connected and automated vehicle projects, surpassing states like California, Florida and Nevada that have yet to establish more comprehensive laws regarding self-driving vehicle technology and their use on public roads. Among these projects is the state-of-the-art American Center for Mobility; the first phase of which is in development

Located at the 335-acre historic Willow Run site in Ypsilanti Township, the Center will serve as a research, testing and self-certification facility for self-driving and connected vehicle technologies that are being developed by private industry, academia and government. It is the second purpose-built facility in the state, the first being Mcity, a smaller proving ground that mimics real-world situations and is located in Ann Arbor on the University of Michigan’s campus.

“Our leadership in the automotive industry is recognized globally and these new regulations are another example of how Michigan is forward-thinking when it comes to innovation in the mobility sector,” said Steve Arwood, CEO of the Michigan Economic Development Corporation. “By creating a more in-depth framework for how self-driving vehicle technology can be researched, tested and used, we’re building a structured plan that takes into account the needs of private industry looking to invest in research and the development of this technology.”

Pure Michigan is a brand representing business, talent and tourism initiatives across Michigan. These efforts are driven by the Michigan Economic Development Corporation, which serves as the state’s marketing arm and lead advocate for business growth, jobs and opportunity with a focus on helping grow Michigan’s economy.

For more on the MEDC and its initiatives, visit MichiganBusiness.org. For Michigan travel news, updates and information, visit michigan.org. Michigan residents interested in seeking employment with any of Michigan’s growing companies should check mitalent.org, where more than 88,000 jobs are currently available in a variety of industries.

Growing French-American Chamber of Commerce, Michigan Chapter announces new member opportunities for 2016

The French-American Chamber of Commerce, Michigan Chapter (FACC Michigan), a not-for-profit business organization committed to the improvement of economic, commercial and financial relations between France and the United States and offering a variety of business, educational and social opportunities to its members, invites prospective members to consider joining the organization in 2016.

Cedric Ballarin, FACC Michigan president and a vice president in the Michigan headquarters of France-based Faurecia, commented on the overall appeal of the Chamber.

“Our Chapter is Michigan’s premiere organization for French-American businesses and professionals, providing members with access to educational corporate events, high-level speakers and exceptional networking opportunities,” Ballarin said. “While business-focused, we also attract individuals from a variety of nationalities who are drawn to the Chamber’s cultural activities and esprit de corps.”

The highlights of 2015 are noted on the FACC Michigan website as a year in review and include an event with the Chief Marketing Officer of Shinola, the FACC Michigan annual meeting, the annual gala and awards ceremony recognizing Olivier Francois, Fiat brand CEO and FCA Chief Marketing Officer, and numerous other networking and social activities held with other affinity groups, such as the Alliance Française de Detroit/French Institute of Michigan and the Alliance Française de Grosse Pointe, which joined forces with FACC Michigan in presenting the Nov. 19 Beaujolais Nouveau event in Birmingham.

The FACC Michigan website is updated regularly, keeping members apprised of French-American business and related community news as well as the many business, social and networking events sponsored by the Chamber. FACC Michigan Executive Director Stephanie Salvadero notes that membership growth in recent years has been swift.

“FACC Michigan now has 200 members, up from 120 in 2012,” Salvadero said. “As the Chamber’s reputation for outstanding programming grows, so does our membership.”

With a 2016 calendar of events currently in the works, FACC Michigan is looking forward to another dynamic year of unique events that continue to offer members access to distinguished speakers, quality business information, and fruitful networking forums, drawing together French and American decision-makers and professionals in the region.

Membership dues are:
• $1,400 – councillor ambassador
• $750 – councillor patron
• $250 –councillor corporate
• $100 – active retail
• $50 – active individual
• $25 – educator
• $25 – student

A complete list of membership benefits can be found here. For questions about FACC Michigan membership, please contact Executive Director Stephanie Salvadero at salvaderos.faccmi@gmail.com or 313.701.8294.

About the French-American Chamber of Commerce, Michigan Chapter
The Michigan Chapter of the French-American Chamber of Commerce (FACC Michigan) is a member of the French-American Chamber of Commerce – the oldest bilateral chamber of commerce in the United States, comprised of 21 chapters in major cities across the nation representing more than 5,000 member organizations. The FACC is a non-profit, non-political organization dedicated to the development of commercial relations between French and American businesses.

Learn more at www.faccmi.org.

French-American Chamber of Commerce Michigan Chapter to host annual gala and awards ceremony April 24; guest speaker is Fiat brand CEO/FCA Chief Marketing Officer

French-American Chamber of Commerce Michigan Chapter to host annual gala and awards ceremony

April 24 event to celebrate business ties between Michigan and France; Fiat Chrysler Automobiles executive Olivier François is speaker and guest of honor

Detroit, Mich. — March 17, 2015 — The French-American Chamber of Commerce, Michigan Chapter (FACC Michigan), a not-for-profit business organization committed to the improvement of economic, commercial and financial relations between France and the United States, will host its annual gala and awards ceremony on Friday, April 24 at Oakland Hills Country Club in Bloomfield Hills. This year’s gala will celebrate the ties that bring France and the United States together through Michigan companies with French roots or French leadership.

Leading an anticipated 165 attendees in an evening of celebration and reflection will be guest of honor and speaker Mr. Olivier François, Fiat brand CEO and Fiat Chrysler Automobiles (FCA) Chief Marketing Officer, and a member of the FCA Group Executive Council. Mr. François will discuss his experience leading FCA Marketing initiatives. He will describe his strategy at defining and highlighting the identities of the individual brands of the company’s portfolio and explain the genesis of FCA’s acclaimed advertising campaigns. A native of Paris, Mr. François holds a degree in economy, finance and marketing from Dauphine University and a diploma from the Institute des Sciences Politiques (IEP), both Paris-based institutions.

Cedric Ballarin, FACC Michigan president and a vice president in the Michigan headquarters of France-based Faurecia, shared his enthusiasm for the upcoming event.

“We look forward to an evening celebrating French culture and contributions that tie Michigan and France together, specifically through the business community,” Mr. Ballarin said. “The gala promises to be a wonderful evening and will be enjoyed by anyone who appreciates all things French, including the food, fashion and culture.”

A portion of the proceeds from the evening will be donated to Medecins Sans Frontieres/Doctors without Borders.

The FACC Michigan gala and awards ceremony begins at 6:30 p.m. with cocktails and a silent auction, dinner at 8 p.m. and speakers beginning at 9 p.m. An afterglow with live music will begin at 10 p.m. Gala tickets are $160 per person for FACC members and $190 per person for non-members; sponsorship opportunities are available. To purchase tickets for the black-tie optional gala, donate items for the silent auction, become a sponsor or for additional information, please contact Stephanie Salvadero, executive director of FACC Michigan, at salvaderos.faccmi@gmail.com.

About the French-American Chamber of Commerce, Michigan Chapter
The Michigan Chapter of the French-American Chamber of Commerce (FACC Michigan) is a member of the French-American Chamber of Commerce – the oldest bilateral chamber of commerce in the United States, comprised of 21 chapters in major cities across the nation representing more than 5,000 member organizations. The FACC is a non-profit, non-political organization dedicated to the development of commercial relations between French and American businesses. Learn more at www.faccmi.org.