Fiat Chrysler Automobiles N.V. (NYSE: FCAU) is planning to expand its footprint in Michigan, specifically Detroit. The automaker confirmed plans to invest a total of $4.5 billion in five of its existing Michigan plants
Ultimately, the move would increase capacity to meet growing demand for its Jeep and Ram brands, including production of two new Jeep-branded white space products, as well as electrified models. The proposed projects would create nearly 6,500 new jobs.
The plant actions represent the next steps in Fiat Chrysler’s U.S. manufacturing realignment that began in 2016. In response to a shift in consumer demand toward sport utility vehicles and trucks, the firm discontinued compact car production and retooled plants in Illinois, Ohio and Michigan to make full use of available capacity to expand the Jeep and Ram brands.
Those actions have resulted in the recent launches of the award-winning all-new Jeep Wrangler and all-new Ram 1500, as well as the introduction of the newest member of the Jeep family, the all-new Jeep Gladiator, at the 2018 Los Angeles Auto Show.
CEO Mike Manley commented:
Three years ago, FCA set a course to grow our profitability based on the strength of the Jeep and Ram brands by realigning our U.S. manufacturing operations. Today’s announcement represents the next step in that strategy. It allows Jeep to enter two white space segments that offer significant margin opportunities and will enable new electrified Jeep products, including at least four plug-in hybrid vehicles and the flexibility to produce fully battery-electric vehicles.
Shares of Fiat Chrysler were last seen trading at $14.91, in a 52-week range of $14.01 to $24.41. The consensus price target is $23.34.