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Howes: Detroit auto production is alive, thanks to SUVs

Daniel Howes
Detroit News

With apologies to Mark Twain, reports heralding the death of auto production in Detroit are exaggerated.

General Motors shocked Michigan, Ohio and Maryland last week with plans to idle four assembly plants next year and eliminate 8,000 salaried jobs. GM CEO Mary Barra spent two days on Capitol Hill this week fielding pleas from lawmakers to reconsider pleas she appears to have politely refused.

Enter Fiat Chrysler. Its late CEO, the legendary Sergio Marchionne, was the first in Detroit to acknowledge the death of the American car and to actually do something about it. Fiat Chrysler dropped car production in the United States long before its hometown rivals dared do the same. Nearly three years later, it’s poised to reap a reward, and so is Detroit the home of the Jeep Grand Cherokee.

The Detroit News reported this week that Fiat Chrysler is prepared to announce as early as next week that it plans to revive its Mack No. 2 engine plant and convert it into a second assembly plant for the iconic Grand Cherokee. Up to 400 new jobs are expected to be created as the automaker and the United Auto Workers move staffing around to meet demand and retooling.

A renovated Mack facility would be Detroit’s first new assembly plant in 27 years. It would cushion the blow that’s expected when GM’s Detroit-Hamtramck plant is scheduled to cease production in June, just weeks before national contract talks with the UAW begin.

The timing for all this plant gamesmanship is no accident. Under terms of the UAW’s contracts, the automakers can’t close, sell or officially idle their plants without the approval of the union. By publicly detailing plans now … or not discouraging some outlets from reporting them … automakers are shaping expectations for a critical round of negotiations.

They won’t be easy. It’s fashionable now in media and investor circles to dismiss the concerns of industrial unions like the UAW to downplay concerns until they morph into confrontation that threatens production, the bottom line or both.

Got news for you, folks. This stuff still matters. For local and state economies, which reap the rewards in good times and feel the sting in bad. For members of Congress, even President Donald Trump whose fury over GM’s restructuring plans will only grow as the automaker says no to reconsideration.

And for the average working folks in places like Detroit, Lordstown, Ohio, and Oshawa, Ontario. It’s not their fault that gas is cheap, cars are passe and next-generation technology consumes enormous amounts of cash that must come from somewhere. One of those somewheres is under-used auto plants that are under-used because too few people want what they make.

SUVs are a different story, and that’s why Detroit stands to be one of the winners in a tale that looked a lot more grim last week than it does today. These pressures will not abate not when times are good, like now, and not any time soon.

Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.

Daniel Howes is columnist and associate business editor of The Detroit News. A former European correspondent for The News, he has reported from nearly 25 countries on three continents and in the Middle East. Before heading to Europe in 1999, Howes was senior automotive writer and a business projects writer. He is a frequent contributor to NewsTalk 760-WJR in Detroit and a weekly contributor to Michigan Radio in Ann Arbor.