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Detroit's "historic" Fiat Chrysler deal gets final City Council approval

City of Detroit
City of Detroit
A rendering of FCA's planned new facilities on Detroit's east side.

The Detroit City Council green-lighted a deal with Fiat Chrysler Tuesday that should bring around 5,000 new jobs to the city, and represents the largest investment in auto manufacturing within Detroit city limits in decades.

Fiat Chrysler says it will spend $2.5 billion expanding the Jefferson North Assembly Plant and reviving the Mack Avenue Engine Plant on the city’s east side. Jefferson North will continue producing the Dodge Durango and the next generation Jeep Grand Cherokee, while Mack Avenue, which had been idled, will produce the next-generation Grand Cherokee and new full-size Jeep SUV, including plug-in hybrid models.

Detroit Mayor Mike Duggan called this “a historic day,” and promised that more announcements along these lines should be coming soon.

“We already have four more logistics centers and supplier parks for Chrysler that are going to be coming forward in the coming weeks with another 1,500-2,000 jobs,” Duggan said. “We have turned the corner.”

The deal involves more than $280 million dollars’ worth of state and city incentives for Fiat Chrysler. That includes up to $84 million in land swaps deals that city arranged in order to acquire more than 200 acres of land that FCA demanded for the project.

Governor Gretchen Whitmer says plans by Fiat-Chrysler to build the first new auto plant in Detroit in decades is good news for the entire state. 

“These jobs will have a sweeping ripple effect throughout our economy," Whitmer said at a press conference Tuesday afternoon. "It will strengthen our economy and working families will benefit across Michigan.”
Duggan hinted that two of the main beneficiaries of those land swaps—Soave Enterprises, LLC, and Crown Enterprises, Inc. (owned by the Moroun family, owners of the Ambassador Bridge) also plan to “strategically” get in on the project by siting logistics centers and supplier parks nearby.

“They’ve all got their sites identified already. In some cases, they bought the sites as part of these land swaps,” Duggan said. “A big part of the land swap is the Morouns want to build logistics centers to serve the new plant. So they were pushing for future opportunities.”

The Morouns will also get $43.5 million in exchange for their 82-acre parcel that’s key to FCA’s expansion plans. Controversially, they will also get an additional 117 acres of city land.

The City Council approved the multi-part deal despite concerns about the land swaps, and a lack of guaranteed jobs for Detroiters.

FCA’s Ron Stallworth says Detroit residents will get a priority window to apply for those jobs before the general public, which should allow greater percentage to get hired. The city and FCA will team up to do public outreach and job training to prepare Detroiters for the available jobs.

“There is a robust effort on behalf of the company, on behalf of the city of Detroit, to get the impacted and the city of Detroit into the plant and applying for these jobs,” Stallworth said.

Whitmer said the “multiplier effect” could create up to eight times as many jobs directly at the new plant.

The deal also comes with a $35 million community benefits package the city and FCA have pledged to honor, though it’s not legally-binding.

Michelle Jackson was on the neighborhood advisory committee that negotiated that package. She ultimately voted against it because she felt the whole process was “rushed,” but still has high hopes for how the project might transform her east side neighborhood.

“We need to be strategic and watch them [FCA] daily,” Jackson said. “Our community members have to step up now. We don’t have an option.”

“We definitely will be holding them accountable," she added. "They’re too close to us not to.”

Fiat Chrysler says it hopes to begin construction almost immediately, and aims to open the new plants by late 2020.

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
Rick Pluta is Senior Capitol Correspondent for the Michigan Public Radio Network. He has been covering Michigan’s Capitol, government, and politics since 1987.
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