FCA’s merger with PSA won’t derail the strategy for big trucks and SUVs.
Even with massive changes in the works for FCA given its planned merger with PSA and negotiations on a new four-year labor agreement with the UAW, the strategy remains on track to build more, bigger, and more profitable Jeeps and Ram pickups. It makes us tired just thinking about all the things that FCA CEO Mike Manley is juggling, but the top man—at least until the merger takes effect—says his team is going full tilt on product plans and portfolio overhauls that were in the works before the merger agreement.
For Jeep, construction is underway in Detroit to turn the unused Mack Avenue engine plant into a facility to make more Jeeps, a $1.6 billion overhaul scheduled to be completed early next year. Production will begin in the fourth quarter of 2020 on a new full-size three-row Jeep SUV to compete with the next generation of the Cadillac Escalade and its GM brothers, the Ford Expedition and Lincoln Navigator duo, and big boys from a number of other premium and non-premium brands. The Detroit plant will add production of the next-generation Jeep Grand Cherokee in the first half of 2021.
Mack Avenue will be one of three Michigan plants that will produce plug-in hybrids, and it will also have the capability to make fully electric Jeeps, with the first such models due in late 2021. Manley has said the Jeep brand will include at least four plug-in-hybrid vehicles. Plug-ins on the way include versions of the Renegade and Compass, as well as the Wrangler. There is an expectation electric motors will find their way into the upcoming three-row Jeeps, too. The CEO says he is more encouraged by pricing on electric vehicles today, especially in Europe, than he was earlier in the year.
Plans also remain on track to start building the new Jeep Wagoneer and Grand Wagoneer three-row luxury SUVs, Manley said. FCA is spending $1.5 billion to retool its truck plant in Warren, Michigan, to build these models starting in the first half of 2021, including the electrified variants. There will be 14 weeks of downtime in the new year at the Warren plant that continues to make the Ram 1500 Classic, the previous-generation version of the pickup. For now, it acts as a more affordable, entry-level option sold in addition to the current Ram 1500. Manley said there is no date in mind for the cessation of Classic production as of now, which has been embraced by consumers.