by Tyler Arnold
Fiat Chrysler Automobiles (FCA) is applying for up to $160 million in tax incentives from the state of Michigan to help offset some of the costs of the company’s planned investment in Detroit.
“We are excited to make a multi-billion-dollar investment that will create thousands of good-paying, union jobs, both in the construction of the new plant and, of course, in its operation for many years to come,” Kevin Frazier, corporate communications manager for Fiat, said in an email.
“We know, and generations of Detroiters know, that an automotive assembly plant has the potential to make the city and its neighborhoods more vibrant places for families and individuals to live and work,” he said.
Under the plan, Fiat says it will invest $2.5 billion in the Detroit area, which the company expects will create about 5,000 jobs. Fiat has requested the tax incentives to assist with the two largest investments – modernizing existing plants to build Jeeps and the Dodge Durango.
The company will spend $1.6 billion on converting the two Mack Avenue Engine Complex plants into assembly plants for the next generation Jeep Grand Cherokee and the Jeep SUV as well as plug-in hybrid models. Fiat said these converted plants would create 3,850 new jobs.
The company said it also will spend $900 million to modernize the Jefferson North Assembly Plant, where it will build the Cherokee and the Dodge Durango. This investment will create 1,100 new jobs, Fiat said.
Fiat already has entered into a community benefits agreement with the city of Detroit in which the company says it will invest $35.2 million in neighborhood improvements, housing, workforce development, education and training programs, and environmental initiatives.
Frazier said Fiat would not comment further on the potential deal because it is still negotiating with the state of Michigan. FCA also would not comment on the potential impact on the Michigan economy or on Michigan taxpayers, deferring to the Michigan Economic Development Corporation (MEDC).
Kathleen Achtenberg, public information officer for the MEDC, would not comment on the specifics of the potential tax incentives until they are approved.
“At this time, FCA and the MEDC are still finalizing the incentive package that will go before the Michigan Strategic Fund board,” Achtenberg said in an email. “As is always our process, the MEDC does not share project details until time of MSF [Michigan Strategic Fund] board approval.”
Achtenberg said Fiat would not be eligible for the state’s Michigan Economic Growth Authority (MEGA) grant program, which was created in the 1990s to promote job growth in the state. Because Fiat already maxed out on retained jobs, any new tax incentives would be separate from MEGA.
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Tyler Arnold is a contributor at Watchdog.org.
Image “FCA Plant” by Fiat Chrysler Auto.
