DETROIT (AP) — Fiat Chrysler can move forward with plans to build a new, $1.6 billion assembly plant in Detroit and invest $900 million to retool and modernize another.
Land deals and community benefits agreements tied to the project were approved Tuesday by the Detroit City Council. A Fiat Chrysler representative told state officials in Lansing that construction can begin immediately, with vehicles expected to roll off the assembly line by late next year. The automaker also will retool and modernize its Jefferson North Assembly Plant, which will be adjacent to the new facility.
“One of the largest auto production centers in America … is going to be on the east side of Detroit,” Mayor Mike Duggan said Tuesday. “It’s going to be transformative.”
For the city, it means jobs. Detroit’s unemployment rate of about 8% is more than double the national average of 3.6%.
Fiat Chrysler expects to create 4,950 new jobs. Under the company’s contract with the United Automobile Workers, laid-off employees get first choice, followed by temporary employees at the current plant. As part of the city’s incentive package, Detroit residents then will have a four-week window to apply and be considered for any remaining jobs before they are open to anyone else.
The company has said about 4,218 jobs will be classified as front-line workers. An additional 345 will be filled by electricians, plumbers, laborers and others in the skilled trades, while 387 are expected to be supervisory positions. New employees would start work late this year or in early 2020.
The city is preparing residents for the Fiat Chrysler jobs through information sessions. They also can receive assistance to help prepare for the application and interview process. Detroit also plans a campaign to make sure residents are aware of the job openings.
Fiat Chrysler spokesman Ron Stallworth said the company is committed to hiring resident of the city. “We’re putting strong efforts into doing so,” he added.
The company also is getting tax breaks and 215 acres of adjacent land the city had to acquire. The land deals are about $108 million, with Detroit and the state splitting it about equally.
One sticking point in the plan involved deals and land swaps with Crown Enterprises, owned by the family of businessman Manuel “Matty” Moroun. The city will pay Crown Enterprises about $43 million for 82 acres needed for the Fiat Chrysler deal. Detroit also is giving Crown Enterprises 117 acres of city-owned property elsewhere in Detroit. That land is valued at $10.5 million, the city said.
Some councilmembers expressed concern that the city is giving up too much.
Council President Brenda Jones said last week that she supports the new jobs that come with the plant, but “equally important are all the swap agreements and how much the city is spending to make this happen.”
“Everyone in the community is not just looking for a job,” she added.
Eggert reported from Lansing, Mich.
This story has been corrected to reflect that the new assembly plant will cost $1.6 billion.