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Fiat Chrysler plans Michigan investment with 6,500 jobs

New York

EVEN as analysts are forecasting declines in vehicle sales in the United States this year and next, Fiat Chrysler Automobiles believes the time is still ripe for expansion.

On Tuesday, the Italian-American carmaker said it planned to spend US$4.5 billion over the next three years to update several Detroit plants and retool an engine plant to make Jeeps, an effort the company said would create about 6,500 new jobs.

But it also took a step back, trimming operations at an Illinois plant and eliminating almost 1,400 jobs.

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The other big American automakers, General Motors and Ford, have been cutting jobs and production. But Mike Manley, Fiat Chrysler's chief executive, said he was confident that the US economy would remain on track. "The economic indicators as we see them are still strong," he said.

He noted that the updated plants would produce three large Jeep models - vehicles that are experiencing growth as consumers gravitate towards SUVs and increasingly abandon sedans. The plan, he said, "is an investment in Jeep as our core brand".

Fiat Chrysler intends to convert its Mack Avenue Engine plant in Detroit to produce a new seven-passenger Jeep model and the new version of its Jeep Grand Cherokee, a move that will add 3,850 jobs.

The company will also update another Detroit plant, known as Jefferson North, to be able to make the next-generation Grand Cherokee as well as the Dodge Durango, another SUV, creating 1,000 additional jobs. A third plant in Warren, Michigan, that currently makes an older version of the Ram 1500 pickup truck, will be modified to also make two other new vehicles - the Jeep Wagoneer and Grand Wagoneer. That will bring 1,400 jobs to the Warren factory.

While the company is expanding in Michigan, it said it would lay off 1,371 of the 5,464 workers at its plant in Belvidere, Illinois. The job cuts will take effect May 6. NYTIMES