Fiat Chrysler Automobiles is planning to convert an engine plant in Detroit to make a new seven-passenger Jeep, people briefed on the plans said Thursday. The move would give the city an economic lift at a time when General Motors and Ford are cutting jobs.
Fiat Chrysler’s idle Mack Avenue plant, which previously made V6 engines, will be extensively retooled over the next 12 to 24 months to begin producing the new Jeep, according to those briefed on the plans.
The plant is likely to employ at least 1,800, they said. Auto assembly plants typically have 2,000 to 4,000 workers.
“Jeep is growing, and to keep that going they have to feed it product,” said Michelle Krebs, executive editor at Autotrader. “And man, that’s good news for Detroit.”
The plans were first reported by The Detroit News. A Fiat Chrysler spokeswoman declined to comment.
The new vehicle will be bigger than any current Jeep model, reflecting a shift in consumer tastes that has roiled the industry. Prompted by low gasoline prices, Americans are flocking to sport-utility vehicles and pickup trucks and shunning compacts and sedans. They have also been drawn by improvements in fuel economy and comfort that manufacturers have made in the last five years.
In 2015, Fiat Chrysler decided to focus on Jeeps, trucks and minivans and to stop making cars for the United States market. This year, Ford Motor said it too would drop sedans from its lineup. General Motors said last week that it planned to idle five North American plants next year — three of them make sedans and the others produce engines. Two of the plants are in the Detroit area.
Heavy bets on large vehicles reflect the automakers’ conclusion that gasoline prices will remain low to moderate for several more years.
Fiat Chrysler said in June that it intended to add at least three new Jeep models by 2022, including a Gladiator pickup that will go into production next year, and several battery-powered variants. The company makes most Jeeps at two plants in Toledo and its Jefferson North plant in Detroit. All three are operating at nearly full capacity.
The automaker said in January that it planned to spend $1 billion to move production of heavy-duty pickups from Mexico to a factory in Michigan and add 2,500 jobs there, a move praised by President Trump.
The Jeep brand, one of Fiat Chrysler’s top moneymakers, is among the few auto brands still growing in the United States. In the first 11 months of this year, Fiat Chrysler has sold 892,000 Jeeps, a rise of 18 percent from the previous year. The company’s total United States sales were up 8 percent, while the overall domestic vehicle market was flat.
Fiat Chrysler is on track to sell about two million Jeeps worldwide this year, up from 730,000 in 2013. But its Fiat, Chrysler and Dodge vehicles are lagging, and it is trailing its rivals in China.