Chrysler is not leaving Mexico

Several automakers have unveiled hefty plans to expand in the United States in recent weeks. Toyota and Mazda teamed up to open a $1.6 billion factory in Alabama by 2021. Fiat Chrysler Automobiles announced it would put $1 billion into its Warren, Mich., factory to make heavy duty versions of its profitable Ram pickup trucks.

Speaking at a women’s event in Washington, President Donald Trump pointed to this good news as proof of his policies.

“We’re making incredible progress,” he said last week. “Toyota is now moving back. Mexico — it’s very interesting — Chrysler is leaving Mexico and moving back to Michigan. You haven’t heard that one in a while.”

In this fact-check, we looked at whether Chrysler is leaving Mexico and returning to Michigan.

To cut to the chase, Chrysler is shifting truck production to the United States, but not at the expense of jobs or plants in Mexico.

From Saltillo to Warren

Saltillo, Mexico, is a nexus of Fiat Chrysler production. It has five plants in the area, doing everything from building engines to assembling finished vehicles. Over 4,000 workers at its truck assembly plant turn out several variations of the Ram truck line.

On Jan. 11, the company said truck production was headed to Warren, Mich., in 2020.

“To support the increased volume at the Warren facility, 2,500 new jobs will be created,” the company said in a news release.

And what would happen at the Saltillo truck plant? It would be “repurposed to produce future commercial vehicles for global distribution,” the release said.

The company’s spokesman in Mexico, Miguel Ceballos, told reporters – and the company’s American press office confirmed – that the automaker expected no change in the number of Mexican workers.

So under the plan, the United States gains workers and Mexico holds steady.

Kristen Dziczek, an economist at the Center for Automotive Research, a governmentand-industry-financed research group in Ann Arbor, Mich., told us the move doesn’t mean Fiat Chrysler is leaving Mexico.

“The plant in Mexico stays open,” Dziczek said. “Chrysler has a very profitable truck product and only two plants in the United States where it makes them. This allows them to retool while keeping production rolling so they can avoid down time.”

The move is part of Fiat Chrysler’s longer term shift away from making cars to making trucks and SUVs in the United States. In 2016, Fiat Chrysler CEO Sergio Marchionne told investors, “By the time we finish with this, hopefully, all of our production assets in the United States will be producing either Jeeps or Ram.”

The company’s press office said over 90% of Ram trucks are sold in America. Industry experts note that trucks are more profitable to Fiat Chrysler than cars.

The last 200 model, a passenger car, rolled off the assembly line at Fiat Chrysler’s Sterling Heights, Mich., plant in 2016. Soon after, the company announced that facility, not far from the Warren plant, would start making Ram trucks.

Marchionne credited the recent tax bill for spurring the latest move. He also argued it was the “right thing to do” given that Ram trucks had always been made in the United States.

But concerns over the fate of the North American Free Trade Agreement might well have played a role, too. Under NAFTA, pickup trucks made in Mexico face no tariff when they cross the border. If NAFTA is scuttled, the tariff would shoot up to 25%.

Dziczek noted that moving truck assembly to the United States is a hedge against that risk.

“If you’re going to put a billion dollars down, why would you put it into a plant that’s on the wrong side of the border?” she said.

Our rating

Trump said that Chrysler is leaving Mexico and moving back to Michigan. The company does plan to spend $1 billion to shift production of Ram trucks from Saltillo, Mexico, to Warren, Mich. However, this is no zerosum game where a U.S. gain is Mexico’s loss.

The Mexican plant will start making another kind of vehicle, and the company expects no change in the number of workers.

There is no question, though, that the company’s billion-dollar investment will add many new jobs in Michigan where Chrysler has long had a presence.

We rate this claim Half True.