Fiat Chrysler announced Thursday it will create 2,500 new jobs in the U.S. by moving the production of Ram Heavy Duty trucks from Saltillo, Mexico, to Warren, Michigan, in 2020.
Also, the company will invest more than $1 billion into the modernization of the existing assembly plant near Detroit. The move will solidify the U.S. as the global manufacturing hub for Ram products, the company said in a news release.
Fiat Chrysler also announced that about 60,000 hourly and salaried U.S. employees, excluding senior leadership, would receive a $2,000 bonus as a result of the new tax reform laws.
“These announcements reflect our ongoing commitment to our U.S. manufacturing footprint and the dedicated employees who have contributed to FCA’s success,” Fiat Chrysler Automobiles CEO Sergio Marchionne said in the release. “It is only proper that our employees share in the savings generated by tax reform and that we openly acknowledge the resulting improvement in the U.S. business environment by investing in our industrial footprint accordingly.”
BREAKING: Fiat Chrysler to invest $1B+ to modernize a Michigan plant, in addition to previous $1B investment in the plant; will add 2500 new jobs, and will give $2,000 bonuses to 60,000 of its hourly and salaried employees in the US because of tax reform. https://t.co/u2wPnDweRm pic.twitter.com/MYx4KHfrNu
— CNBC Now (@CNBCnow) January 11, 2018
The decision comes as negotiators from the U.S., Mexico, and Canada continue NAFTA discussions.
What does NAFTA have to do with it?
The move could protect Fiat Chrysler from paying 25 percent tax rates on trade if the U.S. exits the NAFTA trade agreement, according to Fortune.
The NAFTA trade agreement, implemented in 1994, eliminates most tariffs on imports and exports between the U.S., Canada, and Mexico.
President Donald Trump, who wants the deal overhauled, has called NAFTA “the worst trade deal in the history of the country,” Business Insider reported.
When will there be a decision on NAFTA?
Trade negotiators are scheduled to meet later this month.
Trump told reporters he would be flexible with extending the deadline for concluding talks beyond March, Reuters reported.
“A lot of things are hard to negotiate” ahead of the July presidential election in Mexico, Trump told the Wall Street Journal.
“I thought that was a sensible suggestion from the President. I think all of us are mindful of the Mexican elections,” Canada’s Foreign Minister Chrystia Freeland told reporters on the sidelines of a Cabinet retreat.