The last time Detroit got a new auto plant, Papa Bush was in the White House and Detroit’s real reckoning was years away. In the nearly 30 years since, Ford Motor mortgaged the Blue Oval to survive Detroit’s two other automakers collapsed into federally induced bankruptcy, and all three found profitability.
But this week, something remarkable happened: the Motor City landed an auto plant. An east-side Detroit neighborhood would effectively become ground zero for Jeep, the world's most valuable and authentically American auto brand.
Fiat Chrysler plans to invest $4.5 billion and create 6,500 tax-paying jobs to build a new Jeep plant on the site of its Mack engine plants. And it would invest in nearby Warren to expand Jeep’s lineup with two large SUVs.
The move vindicates late-CEO Sergio Marchionne’s call three years ago to abandon small cars in the United States and weight the lineup more heavily to trucks and SUVs. It also validates a vision that saw automotive gems buried in the bankrupt hulk of Chrysler – and shows just how wrong the smart people in the Obama auto task force turned out to be.
They insisted ol’ Sergio and team deliver fuel-sipping small cars in exchange for gaining control of Chrysler, even though the most desirable assets turned out to be Jeep and Ram. Instead of trucks and SUVs, Team Obama envisioned a future of econo-boxes, hybrids and electric cars. They saw four-dollars-a-gallon gas courtesy of the United States’ (self-imposed) inability to produce its own energy.
They were wrong.
Still, Marchionne saluted, delivered the promised small cars and then followed the market’s lead – right into the profit-rich wheelhouses of Jeep and Ram. Imagine that. The Italian-American automaker wouldn’t be moving ahead with shaping a new assembly operation without hard evidence of increasing demand for its expanding Jeep and Ram lineups.
The automaker wouldn’t be adding a three-row Grand Cherokee in Detroit or larger Wagoneer models in Warren if the brand born from the World War II-era military wasn’t proving to be the most valuable American auto brand on the planet.
Few ways better burnish brand cred than to assemble the metal in the heart of the former Arsenal of Democracy. A company controlled by Italians and run by a Briton insists that authentic Jeeps for North American customers come from the industrial Midwest. Period.
It’s hard to overstate the reality and symbolism here. Fiat Chrysler is investing in Detroit as General Motors prepares to end production at its Detroit-Hamtramck assembly. Fiat Chrysler reckoned with its car lineup three years ago, and GM is just beginning to catch up.
Now, none of this means the industry still isn’t moving to electric cars … or that regulators in China and the European Union aren’t pushing the industry in that direction or that Silicon Valley competitors aren’t angling for their piece of the profitable Auto 2.0 space.
They are. But building trucks and SUVs makes the money to fund those ambitions, and Detroit just landed a prize like it hasn’t in a long time.
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.
