Fiat Chrysler Automobiles stated it will move production of Ram heavy-duty pickup trucks from Mexico to Michigan in 2020, a move that decreases the threat to the automaker’s profit should President Donald Trump pull the United States from the North American Free Trade Agreement (NAFTA).
Fiat Chrysler stated would create 2,500 jobs at a factory in Warren, Michigan, near Detroit and invest $1 billion in the facility. The Mexican plant will be “repurposed to produce future commercial vehicles” for sale international markets. Mexico has free trade agreements with a number of nations.
Fiat Chrysler CEO Sergio Marchionne a year ago raised the possibility that the automaker would move production of its durable pickups to the United States, stating U.S. tax and trade policy would affect the decision.
If the United States exits NAFTA, it might mean that automakers would pay a 25 percent duty on pickup assembled in Mexico and delivered to the United States. About 90 percent of the Ram heavy-duty pickups made at Fiat Chrysler’s Saltillo plant in Mexico are sold in the United States or Canada, business authorities stated.
Negotiators for the United States, Mexico and Canada are arranged to meet later on this month for another round of talks on modifying NAFTA. Canadian government officials previously this week stated they are convinced that Trump intends to reveal his intention to give up the agreement.
Trump has threatened to force the rollback of NAFTA, which makes it possible for the free flow of products made in the United States, Canada and Mexico throughout the borders of those nations. He likewise has slammed automakers for moving jobs and investment in new production facilities to Mexico and prodded them to include more automobile production in the United States.
On Wednesday, Toyota Motor and Mazda Motor announced they would construct a new $1.6 billion joint venture auto assembly plant in Alabama, drawing praise from Donald Trump.