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Fiat Chrysler to invest $1 billion in Michigan plant, add 2,500 jobs

Reuters  |  DETROIT 

By and Joseph White

(Reuters) - Automobiles said on Thursday it will shift production of heavy-duty from to in 2020, a move that lowers the risk to the automaker's profit should pull the out of the North American Agreement.

said it would create 2,500 jobs at a factory in Warren, Michigan, near and invest $1 billion in the facility. The Mexican plant will be "repurposed to produce future commercial vehicles" for sale global markets. has agreements with numerous countries.

a year ago raised the possibility that the automaker would move production of its heavy-duty pickups to the United States, saying U.S. tax and trade policy would influence the decision.

If the exits NAFTA, it could mean that automakers would pay a 25 percent duty on assembled in and shipped to the About 90 percent of the heavy-duty pickups made at Chrysler's Saltillo plant in are sold in the or Canada, company officials said.

Negotiators for the United States, and are scheduled to meet later this month for another round of talks on revising NAFTA. officials earlier this week said they are convinced that Trump intends to announce his intention to quit the agreement.

Trump has threatened to force the rollback of NAFTA, which enables the free flow of goods made in the United States, and across the borders of those countries. He also has criticized automakers for moving jobs and in new to and prodded them to add more auto production in the

On Wednesday, and announced they would build a new $1.6 billion joint venture auto assembly plant in Alabama, drawing praise from Trump.

Vice praised Chrysler's announcement. "Manufacturing is back. Great announcement. Proof that this admin's FIRST policies are WORKING!" Pence said in a posting.

raised its output in by 39 percent in 2017 to 639,000 vehicles, according to data. That made the third-largest of vehicles in in 2017, after <7201.T> and General Motors Co .

The and are the principal markets for full-size heavy-duty pickup trucks, most of which are produced in the by FCA, GM, , <7203.T> and <7201.T>.

Miguel Ceballos, for Mexico, said the company in 2018 and 2019 expects more growth in Mexico, and the moment it stops producing the Heavy Duty pickups it will start to produce the new commercial vehicle, "which still does not have a name," Ceballos said.

"It is going to be for global distribution, at the moment the is only distributed at the level of NAFTA," he said.

Ceballos said there was no current plan to either reduce or grow the workforce in

GM has been readying a plant in Silao, Mexico, to build a new generation of large

on Thursday said it also would make a special bonus payment of $2,000 to about 60,000 hourly and salaried employees in the totaling about $120 million. Typically, U.S. automakers only pay bonuses to hourly workers as part of collective bargaining agreements.

(Reporting by in Bengaluru and in Additional reporting by in Washington and Ana Isabel Martinez in City; Editing by and Matthew Lewis)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, January 12 2018. 06:39 IST