Fiat Chrysler announced plans Tuesday to invest $4.5 billion in its existing Michigan plants and create nearly 6,500 new jobs as a result.
At the same time, the automaker said it will eliminate nearly 1,400 jobs at a plant in northern Illinois.
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In Detroit, the investment will help "increase capacity to meet growing demand for its Jeep and Ram brands, including production of two new Jeep-branded white space products, as well as electrified models," according to a news release from the company.
"Three years ago, FCA set a course to grow our profitability based on the strength of the Jeep and Ram brands by realigning our U.S. manufacturing operations," Mike Manley, Fiat Chrysler's chief executive officer, said in a statement. "Today's announcement represents the next step in that strategy. It allows Jeep to enter two white space segments that offer significant margin opportunities and will enable new electrified Jeep products, including at least four plug-in hybrid vehicles and the flexibility to produce fully battery-electric vehicles."
As part of the realignment, the automaker says it will invest $1.6 billion to convert its Mack Avenue Engine Complex into the future assembly site for the next-generation Jeep Grand Cherokee, Jeep SUV and plug-in hybrid (PHEV) models. Construction will begin this summer, with the first vehicles expected to by the end of 2020.
In addition, the Jefferson North Assembly Plant will modernize to build the Dodge Durango and next-generation Jeep Grand Cherokee.
Since 2016, the company has been discontinuing production of compact cars in response to a shift in consumer demand toward SUVs and trucks, resulting in plant shifts in Illinois, Ohio and Michigan.
Chrysler Fiat said the layoffs at its Belvidere, Ill., plant will be effective in May and are a result of slowing consumer demand for the current Jeep Cherokee.