Fiat Chrysler Ready To Move Pickup Trucks From Mexico If Trump Plays Cards Right
The chief executive of Fiat Chrysler Automobiles said his company could quickly move production of Ram heavy-duty pickup trucks to Michigan from Mexico if President Donald J. Trump’s “America First” economic plan provides enough incentives.
“Properly motivated, it could be executed very quickly by FCA,” possibly by 2019 or 2020, Sergio Marchionne told analysts during a conference call to discuss the company’s record financial results for 2016.
Automakers have been under pressure from the new Trump Administration to build more of their cars in the United States as part of the president’s agenda to create more American jobs. But the industry has countered that it can’t make money on certain vehicles, especially small cars, in the U.S., because of higher labor rates and soaring regulatory costs.
Marchionne and his counterparts from Ford Motor and General Motors met with Trump earlier this week to discuss policies that would make the U.S. more attractive, including some relief on fuel economy requirements, a crackdown on currency manipulation by other countries, and various tax reforms.
FCA imported more than 407,000 vehicles from Mexico last year, the vast majority of them Ram pickup trucks. The former Chrysler, now a Dutch company with headquarters in London, has three plants in Mexico, where it also builds Ram ProMaster commercial vans, Dodge Journey SUVs and Fiat 500 compact cars. About 18 percent of its North American production occurs south of the border, according to LMC Automotive.
Marchionne signaled that FCA could shift those pickups to the United States by 2019 or 2020, if the economic conditions are right. The automaker is in the midst of a massive reshuffling of its manufacturing footprint in the U.S. in order to build more Jeep SUVs, including three new models coming soon. As part of that effort, FCA has built enough flexibility into its Warren, Mich., factory to add heavy-duty Ram production in the future.
“The repatriation of the Ram heavy-duty truck is possible,” Marchionne says. “The infrastructure to execute that is in place and, given the right motivation, it could be accomplished quite easily.”
Marchionne declined to elaborate on the implications of bringing all automotive manufacturing back to the U.S. from Mexico, other than to say “there would be monumental consequences to the industry.”
In 2016, FCA earned a net 1.8 billion euros ($1.9 billion) on revenue of 111 billion euros ($119 billion), and said it is focused on meeting targets outlined in its 5-year plan to eliminate its remaining $4.9 billion in debt by 2018.