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FCA to build new plant in Detroit for the next Jeep Grand Cherokee

The factory will build the next Grand Cherokee and a three-row Jeep.

FCA announced Tuesday that it plans to build a new factory in Detroit. The factory won't be brand-new, but rather will be built on the site of the company's existing Mack Avenue Engine Complex, with the conversion process costing $1.6 billion. The plant is earmarked to build the next-generation Jeep Grand Cherokee and Jeep's long-awaited three-row SUV.

FCA says the factory would also be used to build plug-in hybrid variants, as well as offering the "flexibility" for pure-electric versions of those vehicles down the road. Construction on the plant is intended to begin by the end of the second quarter of this year, with the first three-row SUVs set to roll off the line by the end of 2020 and the next-gen Grand Cherokee arriving in the first half of 2021. The plant conversion is expected to add 3,850 jobs.

A rendering of how the Mack Avenue facility will look after the conversion process.

FCA

The main factory plan won't happen in a vacuum and is part of a big shuffle at Jeep production plants in Michigan. For instance, FCA would spend $900 million to overhaul the Jefferson North Assembly Plant so it can build the Dodge Durango and next-gen Grand Cherokee. Meanwhile, production of the Pentastar V6 engine at the existing Mack plant will relocate to FCA's Dundee plant.

Tuesday's announcement also included details on production of two other new Jeep models. FCA will retool its Warren Truck plant to build the Jeep Wagoneer and Grand Wagoneer, "as well as their electrified counterparts," from early 2021. Those models were officially confirmed way back in 2017. That alone is expected to add 1,400 jobs, FCA said. The factory will also continue to build the Ram 1500 Classic -- also known as the outgoing Ram pickup -- to meet customer demand.

Jeep outlined its future product plans, including the three-row model, Wagoneer and Grand Wagoneer, in this slide from 2018.

FCA

FCA says that the factory announcements reflect its deliberate pivot from small cars to the far more popular -- and more profitable -- Jeep and Ram brands.

"Today's announcement represents the next step in that strategy. It allows Jeep to enter two white space segments that offer significant margin opportunities and will enable new electrified Jeep products, including at least four plug-in hybrid vehicles and the flexibility to produce fully battery-electric vehicles," FCA CEO Mike Manley said in a statement.

FCA has signed a memorandum of understanding with the city of Detroit with regard to acquiring property that'll be needed for the factory expansions and updates, and the city now has 60 days to respond. FCA also says that the announcements are contingent on "development packages with the state and other local governments," likely meaning tax breaks.