FCA has both good and bad news for its US factories

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Fiat Chrysler Automobiles is close to an agreement on the upcoming four-year contract with its UAW represented workers and amid all the commotion has had the time to devise its US strategy as well.

FCA, the third largest US automaker and the seventh biggest in the world has committed to spending $5.3 billion across its US production facilities during the next four years as part of the tentative deal with the United Automotive Workers union. But the knife has two edges – some of the employees at certain factories in Michigan and the Midwest might not feel overly positive about the investments. That’s because the investment strategy also includes the loss of three or more crucial new models to Mexico – such as the Chrysler 200 that is now produced in Sterling Heights. On the other hand the production output of pickups and crossovers that are highly sought on the internal market would be upped across US plants, say the most recent reports. The $5.3 billion investment would mean thousands of jobs have a future: $3.4 billion goes to assembly factories, $1.5 billion towards engine and transmission plants, $315 million will reach stamping facilities and the Mopar parts distribution centers also get $34 million.

And while such a massive program is a positive move, there’s also a massive switch in terms of production for more than half-dozen cars and SUVs, which could be a bad omen for the approaching worker vote on the tentative deal, which was reached this Tuesday. Analysts do say the shuffle, sounding disruptive at first, is a fine strategy because it allows to order the problematic product changeover plans. The automakers looks willing to have the production of low-yield and slow selling cars focused in Mexico while the high-profit, large volume models – such as SUVs and pickup trucks would be concentrated in the US.