The Michigan Strategic Fund has approved a package of incentives in support of Fiat Chrysler Automobile’s (FCA) plans to build a new state-of-the-art assembly plant in Detroit and expand production at five existing Michigan facilities, according to the Michigan Economic Development Corporation. The historic project will create 6,433 jobs in Michigan and generate $4.5 billion in investment.
“This is a historic day for Michigan after we secured the largest automotive assembly plant deal in the country in the last decade – with 6,433 new jobs and $4.5 billion in private investment from FCA,” said Governor Gretchen Whitmer. “FCA’s investment in five existing plants, as well as plans to build an all-new assembly plant here in Michigan, sends an irrefutable signal that Michigan remains the automotive capital of the world. Today’s announcement highlights the strong bet FCA is making on Michigan’s talent, our manufacturing prowess and our leadership in new automotive technology, including electric and autonomous vehicles.”
FCA plans to convert its Mack Avenue Engine Complex into the future assembly site for the next-generation Jeep® Grand Cherokee and an all-new three-row full-size Jeep SUV, along with plug-in hybrid (PHEV) models. The project will generate a total investment of $1.6 billion and create 3,850 new FCA jobs in Detroit. The new facility will be the first new assembly plant to be built within Detroit’s city limits in nearly three decades.
FCA will also invest $900 million in its Jefferson North Assembly Plant (JNAP), also in Detroit, to retool and modernize it for continued production of the Dodge Durango and next generation Jeep Grand Cherokee, creating an additional 1,100 new FCA jobs in the city.
To support these projects in Detroit, the Michigan Strategic Fund (MSF) approved:
- A $10 million Michigan Business Development Program performance-based grant;
- 100-percent Good Jobs for Michigan withholding tax capture for up to 10 years valued at up to $99 million;
- A 100-percent State Essential Services Assessment (SESA) exemption for up to 15 years valued at up to $13.5 million for the JNAP facility;
- A 100-percent SESA Exemption for up to 15 years valued at up to $18 million for the Mack Avenue complex.
“Thanks to the strong support of Governor Whitmer, the Michigan Economic Development Corporation and city of Detroit, I am pleased to confirm that plans to invest in our Jefferson North Assembly Plant and build a new state-of-the-art assembly plant in Detroit have been given the green light,” said Fiat Chrysler Automobile’s Chief Operating Officer for North America Mark Stewart. “At FCA, we are continuing to build a secure future, not only for our company but also for the communities in which we operate. This investment enables us to deliver on this promise in the state and city we call home.”
The city of Detroit has also invested $50.6 million in the Mack Avenue and JNAP projects and anticipates approval of a 50-percent property tax abatement in support of the project. Land deals and community benefits agreements tied to the project were approved May 28 by the Detroit City Council.
The Detroit Brownfield Redevelopment Authority also received MSF approval of a $35 million Michigan Strategic Fund performance-based grant and a $20 million MSF Investment Fund loan to assist with site preparation costs at the sites in and around Detroit that will allow the company to expand.
“A project the size of FCA involves incredible complexities – not just in land assembly and incentives – but in identifying the benefits that a project like this brings to the City of Detroit as well as FCA,” said said Kenyetta Bridges, executive vice president, Detroit Economic Growth Corporation (DEGC). “We were able to identify what was needed for Detroit to be successful and then demonstrate to FCA that we had the capacity and strategy to execute everything needed, within in a very compressed timeline.”
Pending approval of local incentives, FCA also plans to invest $1.5 billion at its Warren Truck Assembly Plant for production of the all-new Jeep Wagoneer and Grand Wagoneer, along with electrified offerings, creating 1,400 new jobs at that facility. The company will also invest more than $236 million at its Warren Stamping plant to add new technology and machinery to support the increased vehicle production. FCA will also invest an additional $169.3 million at its Sterling Stamping Plant, a project that is expected to create 83 jobs. The Pentastar engines, currently built at Mack I, would be relocated to the Dundee Engine Plant as part of a $119 million investment, in addition to the investments going before the MSF board.
To support these expansions, MSF approved:
- A 50-percent Good Jobs for Michigan withholding tax capture for up to five years valued at $6 million for the creation of 1,400 jobs at the Warren Truck plant;
- A 15-year SESA exemption valued at $21 million for Warren Truck;
- A five-year SESA exemption valued at $692,928 for the Warren Stamping Plant;
- A five-year Alternate State Essential Services Assessment exemption valued at $180,900 for the Sterling Heights plant.
The city of Warren will consider a personal property tax abatement in support of the Warren Truck Assembly Plant project.
Michigan Economic Development Corporation CEO Jeff Mason said the company’s decision to expand in Michigan will have a far-reaching impact on the entire state. Estimates from the Center for Automotive Research show every job in an automotive assembly plant has a multiplier of eight jobs throughout the supply chain.
“We are proud to be able to support this type of generational investment in our state and further solidify Michigan’s position as the undisputed leader of automotive innovation,” Mason said. “This is a project that will create new opportunities for businesses around the state and provide a platform for further investment throughout Michigan. We thank FCA for their commitment to Michigan and the continued impact this investment will have throughout our state.”
In support of a total investment of $4.5 billion and 6,433 new jobs, the MSF incentive package for the project is valued at $223.5 million. The total state contribution to the project including environmental, training and other funds is expected to total approximately $261 million.
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