The 3.6-, 3.2- and 3.0-liter Pentastar engines currently built at Mack I would be relocated to the Dundee Engine Plant as part of a $119 million investment. Engine production at Mack I is expected to end by fall, the first step in the site's conversion to an assembly plant.
The investments in Michigan are pieces of an effort begun by Marchionne and continued by his successor, CEO Mike Manley, to stoke already strong Jeep brand sales as well as the automaker's other trucks and SUVs.
"(We) continue to invest in Jeep as our core brand," Manley said. "We'll bring Jeep back into what I think is a good segment. For us, the Mack facility is complete white space. So, that opens up, I think, a segment that has grown strongly. We don't have a three-row offering."
The $4.5 billion for the Michigan facilities would enable Jeep plants to build hybrid vehicles, he added, and equip some vehicles with advanced driver-assist features that could handle steering, acceleration and braking while monitoring the road.
Upgrades at the Mack facility would start this spring. The three-row Jeep would hit showrooms in the fall of next year and would be "quickly" followed by the new Grand Cherokee as well as the Jeep Wagoneer and Grand Wagoneer built at the Warren Truck plant.
The projects are contingent on land acquisition and negotiation of development incentives with the state and with the cities of Detroit, Sterling Heights, Warren and Dundee. The investments in Detroit should boost Fiat Chrysler's exports from Detroit to Europe, the Middle East, Africa and the Asian markets---a potential boon to the city that helped put America on wheels.
“We export Grand Cherokee today," Manley said. "That's going to continue into the future. Our international markets have expressed interest in the three-row. Its export really will be in those parts of the world that larger vehicles play because clearly it's going to be a larger vehicle than Grand Cherokee, as is Wagoneer."
Added Patrick Anderson, CEO of the East Lansing-based Anderson Economic Group: "The re-opening of a ... plant to build new-generation Jeeps is unequivocally good news. It builds on our strengths in Michigan; it leverages great brand values for Chrysler; and it focuses on products that have a well-established market.
"It also underlines what we have been pointing out since GM’s announcement several months ago: the momentum in the auto market is all towards crossovers and trucks, and not electric and hybrid vehicles."