Fiat Chrysler Automobiles has a good feeling about the recent tax reform. That feeling is so good that it says it will move some of its Ram truck production to Michigan from Mexico.
On Thursday, the automaker said it would spend over $1 billion in revamping the Warren Truck Assembly factory that will begin in 2020 making its Ram heavy-duty trucks. Currently, the truck is made south of the border in Saltillo, Mexico.
To support this move, Fiat Chrysler said 2,500 new jobs will be added in Michigan. FCA added that it is giving a one-time bonus of $2,000 to 60,000 of its workers in the U.S.
It is proper that the company’s employees are able to share in the tax reform savings and that we acknowledge openly and the improvement in the business environment in the U.S. by investing accordingly in our industrial footprint, said the automaker’s CEO Sergio Marchionne through a press release.
Fiat Chrysler added that it is not planning to shutter its plant in Saltillo, but did not comment on which of its models would be made there after production of the Ram moves to Michigan.
The automaker said that the investment it announced on Thursday is separate from a labor deal of 2015 with the UAW union. FCA pledged to invest more than $5.3 billion in plants across America to guarantee more union jobs as part of the agreement.
Several companies have made announcements of employee bonuses in hikes in minimum age since the Republican-controlled Congress passed tax reform legislation in December. The new measure lowers corporate tax rates to 21% from a previous 35%.
The decision also comes amidst the continuation of negotiations between the U.S., Canada and Mexico over the North American Free Trade Agreement. The latest round of negotiations starts January 23 and will be held in Montreal.
A boost to production was already planned by FAC at its Warren plant. In early 2017, the company announced it would spend over $1 billion to pay for expanding factories in Michigan and Ohio which would create 2,000 jobs. Some of the money for that was destined for Warren, where the company is planning to begin making its Grand Wagoneer and Jeep Wagoneer in 2020
The decision by FCA was hailed by the U.S. Vice President Mike Pence who tweeted that manufacturing is back and is proof the America first policies of the administration are working.