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Land
deals,
incentives
OK’d for
new auto
plant in
Detroit
By
COREY
WILLIAMS
and
DAVID
EGGERT
APNews.con
DETROIT
- Fiat
Chrysler
can move
forward
with
plans to
build a
new,
$1.6
billion
assembly
plant in
Detroit
and
invest
$900
million
to
retool
and
modernize
another.
Land
deals
and
community
benefits
agreements
tied to
the
project
were
approved
Tuesday
by the
Detroit
City
Council,
shortly
before
Michigan’s
economic
development
board
approved
a $223
million
incentive
package
in
exchange
for the
automaker
creating
6,400
jobs,
including
nearly
5,000 in
the
city.
A
Fiat
Chrysler
executive
said
construction
will
begin
immediately,
with
vehicles
expected
to roll
off the
assembly
line by
late
2020.
The
automaker
also
will
retool
and
upgrade
its
Jefferson
North
Assembly
Plant,
which
will be
adjacent
to the
new
facility.
“One
of the
largest
auto
production
centers
in
America
... is
going to
be on
the east
side of
Detroit,”
said
Mayor
Mike
Duggan.
“It’s
going to
be
transformative.”
For
the
city, it
means
jobs.
Detroit’s
unemployment
rate of
about 8%
is more
than
double
the
national
average
of 3.6%.
For the
state,
it’s an
affirmation
that
Michigan
“remains
the
automotive
capital
of the
world”
and that
its
United
Automobile
Workers
“build
the best
cars,
trucks
and SUVs
on the
planet,”
Democratic
Gov.
Gretchen
Whitmer
said at
a
celebratory
news
conference
in
Lansing.
She
called
it the
largest
auto
assembly
plant
deal in
the U.S.
in a
decade
and said
the jobs
will
have a
“sweeping
ripple
effect”
throughout
the
state’s
economy.
Fiat
Chrysler
expects
to
create
4,950
new jobs
in
Detroit,
and
additional
ones in
the
suburbs
— 1,400
at the
Warren
Truck
Assembly
Plant
and 83
at its
Sterling
Stamping
Plant.
Under
the
company’s
contract
with the
UAW,
laid-off
employees
get
first
choice,
followed
by
temporary
employees
at the
Detroit
plant.
As part
of the
city’s
incentive
package,
Detroit
residents
then
will
have a
four-week
window
to apply
and be
considered
for any
remaining
jobs
before
they are
open to
others.
The
company
has said
about
4,218
jobs
will be
classified
as
front-line
workers.
An
additional
345 will
be
filled
by
electricians,
plumbers,
laborers
and
others
in the
skilled
trades,
while
387 are
expected
to be
supervisory
positions.
New
employees
would
start
work
late
this
year or
in early
2020.
The
city is
preparing
residents
for the
Fiat
Chrysler
jobs
through
information
sessions.
They
also can
receive
assistance
to help
prepare
for the
application
and
interview
process.
“We’re
putting
Michigan
and
Detroit
first,”
said
Mark
Stewart,
chief
operating
officer
for Fiat
Chrysler
North
America.
“This is
our
home.
We’re
very
proud.”
The
company
is
getting
tax
breaks
and 215
acres
(87
hectares)
of
adjacent
land the
city had
to
acquire.
The land
and site
preparation
deals
are
about
$108
million,
with
Detroit
and the
state
splitting
it about
equally.
Included
in the
$223
million
state
incentive
package
— which
was made
public
for the
first
time
only
minutes
before
its
approval
by the
Michigan
Strategic
Fund
board —
is $55
million
for site
preparation
and $168
million
in tax
breaks,
exemptions
and
cash.
The
automaker
committed
to
creating
and
maintaining
at least
3,500
jobs in
Detroit
and
Warren
with an
average
wage of
$59,846,
as part
of a
“good
jobs”
incentive
that
lets
companies
keep all
or half
of the
income
taxes
associated
with new
jobs for
up to 10
years if
the jobs
pay at
least
the
regional
average.
One
sticking
point in
the plan
involved
deals
and land
swaps
with
Crown
Enterprises,
owned by
the
family
of
businessman
Manuel
“Matty”
Moroun.
The city
will pay
Crown
Enterprises
about
$43
million
for 82
acres
(33
hectares)
needed
for the
Fiat
Chrysler
deal.
Detroit
also is
giving
Crown
Enterprises
117
acres
(47
hectares)
of
city-owned
property
elsewhere
in
Detroit.
That
land is
valued
at $10.5
million,
the city
said.
Some
councilmembers
expressed
concern
that the
city is
giving
up too
much.
Council
President
Brenda
Jones
said
last
week
that she
supports
the new
jobs
that
come
with the
plant,
but
“equally
important
are all
the swap
agreements
and how
much the
city is
spending
to make
this
happen.”
“Everyone
in the
community
is not
just
looking
for a
job,”
she
added.
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