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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Chevrolet Bolt EV, Honda Ridgeline and Chrysler Pacifica Win 2017 North American Car, Truck and Utility Vehicle of the Year

On Monday, the North American International Auto Show (NAIAS) announced the Car, Truck and Utility Vehicle of the Year awards.

In its 24th year, the awards are chosen by a jury of nearly 60 automotive journalists. Vehicles are judged on several categories including: innovation, design, safety, performance, technology, value and driver satisfaction. This year marked the first year that three awards were presented. Previously, crossovers, SUVs and minivans were included in the truck category.

The Car of the Year went to the Chevrolet Bolt EV. The Bolt aims to be the first affordable electric car, starting under $30,000 and covering more than 200 miles on a single charge.

The Honda Ridgeline won Truck of the Year and was designed using a car-type body structure for improved fuel economy. It also features unique speakers in the walls of the truck bed and a large under-bed storage compartment.

The Utility Vehicle of the Year went to the Chrysler Pacifica, which features rear video screens that can either play videos or become touch screens for gaming. The Pacifica is also the first minivan to offer a plug-in hybrid model, covering 35 miles on a single battery charge.

View more coverage from the 2017 auto show or check out the Chamber’s photos from the show.

MEDC and MICHauto Tour with Michigan-based Vehicles to Promote Auto Industry’s Role in Michigan’s Economic Comeback

DETROIT – August 1, 2014 – As part of a continuing effort to raise awareness of the importance of the automotive industry to Michigan’s economic comeback, and the role it will play in the state’s future, two leading automotive advocates are collaborating to tour the state in a fleet of vehicles with ties to Michigan.

The Michigan Economic Development Corporation (MEDC) and the Detroit Regional Chamber’s MICHauto are leading the tour, which will include stops at the Center for Automotive Research’s Management Briefing Seminars on Aug. 4-7 in Traverse City, the 2014 Woodward Dream Cruise on Aug. 16 and the MICHauto Summit on Sept. 23.

Statistics show how this high-tech industry continues to drive innovation and create jobs and investment in Michigan. In 2013, 28 Michigan counties received more than $2.3 billion in automotive investment, creating nearly 11,000 jobs.

“The automotive industry is driving Michigan’s economic revival in a significant way and that’s a message we want to be sure is both seen and heard across the state,” said Nigel J Francis, Senior Vice President, Automotive Office at the MEDC. “A picture is worth a thousand words, and this tour is a way to visibly showcase and share the great story about Michigan’s auto industry.”

The vehicles comprising the tour will feature logos from Pure Michigan and the Detroit Regional Chamber/MICHauto and represent a variety of manufacturers and suppliers that assemble, design and/or engineer world-class vehicles in Michigan. The vehicles, representing the global automotive presence in Michigan, include:

Chevrolet Silverado
Chrysler Jeep Grand Cherokee
Ford F-150
Ford Mustang
Nissan Rogue
Toyota Tundra

“Perceptions of Michigan’s automotive industry are lagging behind reality, even here at home. The industry is growing and sparking high-tech innovation in our state in a way that would make Henry Ford smile and Steve Jobs jealous,” said Glenn Stevens, Vice President, MICHauto and Strategic Development for the Detroit Regional Chamber. “The auto industry offers Michigan the opportunity to again redefine mobility for the world, and that’s something we need to get behind as a state. Michigan’s automotive industry is more than our glorious past; it’s setting the pace for our prosperous future.”

Auto enthusiasts are invited to join the conversation by sharing sightings and photos from around the state on social media channels with the hashtag #MichiganIsAuto.


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 82,092 jobs are currently available in a variety of industries.

MICHauto is a key economic development initiative of the Detroit Regional Chamber, dedicated to promoting, retaining and growing the automotive industry in Michigan. The program serves as the unified voice of Michigan’s automotive industry, providing a platform for various automotive stakeholders to collaborate on matters related to advocacy, awareness, business attraction, and talent attraction and retention. To learn more, visit michauto.org.

Economic Advantage of a Healthy Workforce

Companies help employees lead fit lifestyles

By Noah Purcell

Page 42

Even the best trained, most talented workers can only do so much for their employers from the constraints of a hospital bed. In an effort to address rising health care costs, Michigan companies are creating a competitive edge as they help their employees enjoy better lifestyles.

“We care about our employees from the perspective that we want them to be healthy and well so that they can be happy and productive,” said Susan Morgan Bailey, manager of wellness and health promotion at DTE Energy.

The national averages reflect a yearly health care cost growth of seven to eight percent, which makes the conversation of pairing health and wealth even more important. One undertaking of the St. John Providence Health System, SmartHealth, has effectively addressed spiraling costs.

“Our health care expenditure costs, instead of the national average of an eight percent increase a year, we’ve been less than two percent, that speaks for itself,” said Andrew Vosburgh, M.D., corporate medical director of St. John Providence Health System. “People are healthier; they’re getting the help that they need and we’re leading by example. We’re helping the sickest and that’s what a health care organization is supposed to be about.”

Made into a statewide program in 2009 and currently being turned into a national initiative within the Ascension Health Ministries, SmartHealth has focused on bringing down costs for those who need the most health care. Before the launch of the program, St. John Providence was spending 50 percent of its total dollars on 3.4 percent of its employees.

For Dr. Vosburgh, who is responsible for health and wellness, and SmartHealth, helping this group of individuals began with identifying obstacles.

“For me, it is letting me see what your barrier to care is and then let me see if I can knock down that barrier for you to get you to be healthier. In my program, we’ll cover what you need to get you to the optimum health and when we did that, with the people who participated — and it was completely voluntary — we saw a 25 percent reduction in how much they spent,” Dr. Vosburgh said. “And when you’re talking about 50 percent of your money, 25 percent can be a huge amount of money.”

Whether the individual’s barrier is lacking a ride to the doctor or their co-pay is too high, the SmartHealth program addresses needs first instead of being yoked to what is covered as part of the insurance provision.

“[SmartHealth] is separate from the insurance plan. There is a separate budget to do this, and we’ve probably recognized a $9- $10 million dollar savings on just doing it,” Dr. Vosburgh said.

For employers throughout the state, efforts to streamline costs through improved health stretches beyond the workplace. Both DTE Energy and Chrysler point to their efforts in involving not just their employees, but also their employees’ families.

“One of the things we thought about very earnestly back in 2010 was what could we do to go to the next level of program and what could we do to engage families because we know sometimes that the health care decision maker is not an employee, it might be a spouse,” said Chrysler’s Director of Integrated Health Care and Disability, Kathleen Neal.

For example, at Chrysler, weight management through heightened activity is a point of emphasis for both employees and their families.

“Our salary population for 2013 has the opportunity to engage in some fitness challenges and that involves exercise, walking and nutrition. We’ve been able to see visible wellness at Chrysler,” Neal said. “With the onset of this program in January, our salaried employees are wearing pedometers. They are up, they are walking, they are challenging their colleagues and their family members to walk with them.”

In addition to stoking behavior change through competition, Chrysler has also struck at barriers to care. An on-site fitness center, clinic and pharmacy ease access to everyday health needs while a registered nurse on staff and an annual ‘Day of Wellness’ event, at which employees can have bio-metric screenings administered, help shape employees’ overarching health plans.

DTE Energy’s recent initiatives were helped by fortuitous pairing. In late 2011, the company began overhauling office space to promote a more open and collaborative work environment which lent itself to integrating health and wellness into a worker’s daily process.

“Because we were in the process of overhauling the office environment and even some of our field locations, I was able to say ‘If we’re going to be redoing a floor, then on that floor I’d like it to be a pre-specification that we put a walk station in,” Bailey said.

The walk stations, a treadmill with a workspace sitting over it with a phone and a computer, coupled with standing desks are all part of efforts to promote health and wellness by crafting an environment that promotes movement throughout the day. This focus is also seen at Chrysler as the company has mapped out indoor walking trails through the corporate headquarters.

“We are very focused on encouraging the behaviors that we know contribute to long-term health. We want them to be connecting with a physician and building a relationship with a physician that will help them be healthy for a long time,” Bailey said.

Along with on-site health coaches and office enhancements, DTE is furthering these connections and behaviors through the structure of their benefit packages as well.

“We do have an expectation that you’ll start out at the beginning of the year at the enhanced level of benefits, and the expectation is that to maintain that enhanced level of benefits you will see your physician for a health screening, you will complete a health-risk assessment online,” Bailey said.

“If your numbers are out of range, you’ll take an extra step toward action, which is either connecting with a health coach or completing physical activity training. If they miss any of those markers — they ultimately have six months to do all of that — then they move down to the standard level of benefits which would mean that they pay more for health care,” Bailey said.

Noah Purcell is a metro Detroit freelance writer.