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Chrysler touts $1bn investment amid Trump pressure

Fiat Chrysler said on Sunday that it would invest an extra $1bn in the US and create 2,000 new US jobs at a time when global carmakers are under pressure from President-elect Donald Trump to boost US jobs and investment.

Fiat Chrysler, which made its announcement as the Detroit auto show geared up to open to the press on Monday, insisted that the move had nothing to do with pressure from Mr Trump. But over the past week, the president-elect has ratcheted up his Twitter assault against global carmakers for producing cars and investing in Mexico rather than in the US. 

Last week Ford, Chrysler’s Detroit rival, caved in to Mr Trump’s pressure, announcing that it had decided to scrap a plant in Mexico and invest $700m in Michigan, after repeated criticism from the president-elect.

Only hours earlier Mr Trump had turned his ire on General Motors, sending out a tweet threatening the Detroit carmaker with a “big border tax” if it continues to import Mexican-made Chevy Cruze models to the US. GM later said a little-selling hatchback was the only Cruze model made in Mexico, with the sedan version manufactured in the US. 

Mr Trump later targeted Toyota by tweet, telling the Japanese carmaker that it would face heavy penalties if it chose to make cars for the US market in Mexico.

Industry analysts say carmakers are scrambling to figure out how to adjust their production plans to avoid inflaming the incoming president — or how to present their plans in a light that will gain his approval without making large actual adjustments.

Chrysler insisted its decision to invest $1bn in Michigan and Ohio and create 2,000 new jobs was unaffected by Mr Trump’s recent tweets, and that the jobs had never been destined for Mexico. 

The company said the move was part of a “continuation of efforts already under way to increase production capacity in the US of trucks and SUVs to match demand”. But auto industry analysts said the timing of the announcement might suggest it is part of Chrysler’s public relations plan to pre-emptively deflect potential criticism from Mr Trump.

“Today’s announcement is the second phase of an industrialisation plan announced in January 2016. The plan called for the realignment of the company’s US manufacturing operations to fully utilise available capacity to respond to a shift in market demand for trucks and SUVs, and to further expand the Jeep and Ram brands”, the company said.

Via FT