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By Bernie Woodall and David Shepardson
DETROIT Jan 8 Fiat Chrysler Automobiles
on Sunday said it will invest $1 billion to
modernize two plants in the U.S. Midwest and create 2,000 jobs,
upping the ante as automakers respond to threats from
President-elect Donald Trump to slap new taxes on imported
FCA's announcement that it would retool factories in Ohio
and Michigan to build new Jeep sport utility vehicles, including
a pickup truck, and potentially move production of a Ram
heavy-duty pickup truck to Michigan from Mexico, also
highlighted the auto industry's keen interest in getting relief
from tough fuel economy rules enacted by the outgoing Obama
General Motors Co 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. Trump has criticized GM for building cars in Mexico
while laying off workers in the United States.
Barra, who is on an advisory committee to Trump, told
reporters that decisions about where to build specific vehicles
are made "two, three four years ago". Overall, she said of
Trump, "we have much more in common than we have different".
Barra had a conversation with Trump on Tuesday, a person
briefed on the call told Reuters. Barra declined to discuss her
conversations with Trump.
Many automakers plan to use the annual North American
International Auto show in Detroit, which started on Saturday,
to tout investments in the United States and a commitment to
U.S. employment against the backdrop of Trump's criticism of
automakers for shipping vehicles into the U.S. from Mexico.
Daimler AG Chief Executive Dieter Zetsche on
Sunday said during an auto show event that the German automaker
plans to invest another $1.3 billion to expand sport utility
vehicle (SUV) production at a factory in Alabama.
Automakers are girding for rounds of questions about Mexican
investments and U.S. jobs in the wake of Trump's harsh criticism
Most of the major automakers in the U.S. have substantial
vehicle making operations in Mexico, as well as complex networks
of parts makers that supply their factories in the U.S. and
support jobs and investment in states such as Ohio and Michigan.
FCA's investment decisions were not related to Trump's
recent attacks Ford Motor Co, GM and Toyota Motor Corp
for building cars for the U.S. market in Mexico, people
familiar with company's moves said on Sunday.
The company had already signaled plans to expand truck and
SUV production at its U.S. plants, and discontinued production
of small and medium-sized cars in two U.S. factories.
FCA executives did not confer with Trump before making the
decision on the new big SUVs and a Jeep pickup truck, according
to a person familiar with the company's thinking.
The same source said FCA CEO Sergio Marchionne wanted to get
out the news about adding jobs and investment in the United
States in case the company encounters more criticism from Trump.
Still, Fiat Chrysler's announcement landed as global auto
industry executives gathered for the annual auto show in a
climate of growing uncertainty about the trade and regulatory
policies the new Republican administration will pursue.
Trump, who will be inaugurated on Jan. 20, has talked about
rolling back environmental regulations, and supporting corporate
tax cuts - moves automakers would welcome.
He has just as explicitly warned that he will move to raise
the costs of importing vehicles from Mexico, a policy industry
executives said could hurt their businesses.
PLAYING UP U.S. INVESTMENTS
Since Trump's election, automakers and other companies have
played up their investments in the United States.
Last week, Ford scrapped plans to build a $1.6 billion plant
in Mexico and invest $700 million in a factory in Michigan. Ford
will still move production of Focus small cars to Mexico, but
will instead cut total production of the cars by consolidating
their assembly in an existing Mexican plant.
Hinrich Woebcken, chief executive of the North America
Region for German automaker Volkswagen AG, told
Reuters on Sunday the automaker plans to invest $7 billion in
the United States between 2015 and 2019 and will start building
its new Atlas SUV in Tennessee later this year.
Volkswagen has had a plant in Mexico for 50 years and it is
not shifting any jobs to Mexico from the United States.
"We do not make our investment decisions based on
administrative cycles. Our business is really an 8-, 12-,
14-year horizon when we look at investments," Woebcken said on
the sidelines of the Detroit auto show.
FCA said a plant in Warren, Michigan, near Detroit, would
make the Jeep Wagoneer and Jeep Grand Wagoneer SUVs, while a
Toledo, Ohio, factory would produce the Jeep pickup.
The company said the production plans in Ohio and Michigan
were "subject to the negotiation and final approval of
incentives by state and local entities".
U.S. consumers have increasingly shifted toward SUVs and
pickup trucks and away from sedans in recent years, as gasoline
prices have remained relatively low.
A year ago, Marchionne said FCA would cease production of
two sedans and focus on SUVs and pickups.
Marchionne said in a statement on Sunday that the lineup
changes were due to that consumer shift.
"We continue to reinforce the U.S. as a global manufacturing
hub" for SUVs and pickup trucks, he added.
(Reporting by Nick Carey, David Shepardson and Bernie Woodall;
Editing by Alan Crosby, Lisa Von Ahn and Himani Sarkar)