Crain’s Detroit Business: Start us off by backing up a little bit in the history of how this project came to be, starting with Sergio Marchionne and Mayor Mike Duggan first having the conversation about the future of FCA’s presence in Detroit.
Mark Stewart: It precedes me a little bit as I’ve been with the company almost two years now. I always like to say I hit it at one of the luckiest times of the company to come in a period of growth and investment in Detroit. As you said, it goes back to a discussion with Sergio Marchionne and Mike Manley together with Mayor Mike Duggan and Mayor Duggan said, ‘Hey, give us a chance to go through this. We understand you guys are going to make an investment into a new assembly operation and we’d like to have a shot to do it in Detroit.’ And, of course, Sergio and Mike absolutely agreed with that process as well.
And in looking to other places around the country as well, we felt it was really important — Sergio and Mike, myself as well coming into the company — that Detroit is our home and what better place to invest than right in the city of Detroit and just miles away from the last major assembly plant investment 30 years ago with Jefferson North, which is ours as well, which has the Grand Cherokee. It absolutely made sense. The discussions continued and, again, I came in at a very lucky time to get in on the team and to work with the mayor’s office as well as with the governor’s office and the economic development folks and mostly importantly with the residents and the community around our plant to make it happen.
So you had the two Mack Avenue engine powertrain plants. One had been idled (since 2012). How did they come into the focus? Who was the first person who said, ‘Hey, let’s just turn the two powertrain plants into an assembly plant?’
As you mentioned, one of the plants had been idled for quite some time with older technology that it had and just looking for an opportunity to not only revitalize an engine plant but to turn it into an assembly plant with the lower emissions in the country, to provide really good paying jobs into the community. And it makes good business sense, it makes good community sense because we’ve got out our supply base in and around the city of Detroit. We can share when it comes to logistics and supply chain. We can develop together with the city great job-training programs and providing great jobs in the city.
What kind of challenges did you face early on? The big one the came to mind was the city needed to go assemble the land you needed. It wasn’t as simple as taking the existing footprint and turning it into a new plant, right?
Absolutely. I think one of the great things in working together with the city was making sure no residents were displaced. In making sure as we did that, we did it in an environmentally conscious way that was going to enhance the neighborhoods, not detract from neighborhoods and to help provide some great jobs and the infrastructure around the plants as well to provide new business opportunities for some areas that hadn’t had that for some time. The mayor’s office and the team did a really job nice of working together with the residents on different land agreements and so forth to get the quantity of land. We provided how much land we would need around the facilities in order to expand and to grow to have supply base incoming and outgoing. And the city did a great job of doing that – and doing it on a very tight timeline. It was pretty impressive.
You gave them a tight timeline and then the construction of the paint shop and repurposing both engine plants, that was a pretty fast timeline as well. What did you learn from that? And why were you pushing so fast to get this project completed so quickly?
Well, obviously it’s a need in the marketplace. We are very fortunate with the enthusiast and the loyalty we’ve got for our Jeep brand, with our Dodge brands and getting this new facility up and running was really critical to our business plan and to bring a new three-row full-size SUV as well as next-generation Grand Cherokee (to market). As the ink dried in terms of all of it coming together with the city, with the state and all of the residents with the community benefits we’ve made around the community and to the schools, we began construction back in May 2019. It was a major milestone. It’s one of the fastest I’ve seen, definitely the fastest. In August, we raised the first piece of steel for that 800,000-square-foot paint shop. And then our first equipment was loaded into that new paint shop at the start of October. Construction has marched along really well. … (There have been) challenges with construction, especially as the COVID pandemic hit. But the team has really done a great job to get things on track as we were able to safely bring the construction folks as well as our launch team members back into the facility (in May).
You had the coronavirus pandemic hit in March, you had to shut down the construction for six to eight weeks. Obviously this also was affecting the company in every other assembly plant, at least in Michigan and certainly other states as well. How has that changed the way Fiat Chrysler goes about constructing automobiles every day?
Across all of the sites, we looked at tens of thousands of stations around all of our assembly, powertrain and stamping plants around North America, not just the U.S. We’ve made substantial changes in terms of workspace distancing between stations, the installation of making sure we have multi layers of safety protocols to keep folks safe. It’s really important … at work that we’re wearing our mask, we’re wearing our goggles at work and to keep ourselves safe and keep others around us safe and then in turn their families at home. We’re very diligent with that process and we work together with UAW daily making sure any concern that comes us is addressed immediately. We are just absolutely on it. … I think everybody is very comfortable that it is a very safe place to work.
Did you have to change anything in this Mack plant in terms of how workers will flow and such from the design you had originally to the sort of COVID-ready automobile plant. This will be basically the first automobile plant in North America to open during the pandemic.
Similar to all of the other sites just in terms of how we both enter and exit the building, making sure we have the right spacing, the right security screening process protocols, the thermometers that you walk through or the temperature reading, all of that was installed. Within the lines as well, taking all of those lessons learned (in other plants), they were immediately applied to the new plant as well so that as it starts it’s not a reconfiguring, but it’s there from the very beginning.
What type of challenges did you encounter with your contractors with the labor force they needed for skilled labor in the various crafts? What type of hurdles did you run into
We made sure that not only with our contractors but across all of our supply base that the same regimented safety protocols were being implemented across our supply base, our construction supply base as well, to make sure everybody in the facility was safe and continued to be safe. Just in terms of the early times of us all coming back into work in May, there were some folks nervous about coming back until they came in to see it. One of the things we did was we hosted sessions with our team leaders, with supervisors, with external supplier supervision so they could come and see with their own eyes and do some videotaping as well of some walkthroughs that different members of the team did to make have people see that so folks were comfortable. And we were able to ramp back up really quickly, which was a strong testament to the leadership of the team.
This project at Mack Avenue was being done in concert with the construction and retooling at the Warren truck plant and you also had other investments tied to this at Sterling Stamping and eventually Jefferson North will get some revitalization as well.
Our Warren truck facility, as you mentioned, it is down for the retooling at the moment. And it will be coming back online at the start of the fourth quarter. Everything is on track with that and we’re really excited to get that plant back up and going and get ready for the launch there as well. We just did our reveal for the new Grand Wagoneer, some early looks to that. … And then as look to the other investments are all on track. With Jefferson North, we’ve not planned to take Jefferson North down for any of the retooling until after we’ve already had the Mack or the Detroit Assembly Complex up and running. Everything is tracking well. I’m really excited to the fact with COVID it’s obviously had some challenges with folks not being at work in terms of being still being off work and the need for extra folks.
And as we looked, it was a really great opportunity for us to pull ahead the hiring and the hiring commitments that we made for the residents of Detroit. And we had a great pipeline already built thanks to the folks at the City of Detroit and the Detroit to Work program. And we started interviewing on July 13 for full-time assignments. And to date, we’ve already interviewed 2,900 folks from the city of Detroit and as of just a few days ago we’ve made just over 1,600 offers. We’re super pleased. We’ve only had one decline. So that’s not too bad of a (hiring) rate so far. And of that 1,600, over 1,000 folks, nearly 65 percent of them, have already opted to join us now as supplementals at other sites, which is a great learning experience, great for folks on getting folks into the FCA family and at work. And what a way to kickstart a new plant, to have 1,000-plus team members started in other sites that will move to their home base at Mack.
These are all Detroiters?
All Detroiters, yep.
The mayor has kind of used this new program as the model for (creating jobs for Detroiters) in big development projects. So it seems like he’s put a lot of pressure on you not to fail here.
Well, I don’t think pressure is the right phrase for it. We’ve had a lot of collaboration with the mayor’s office, with economic development from the state and also from our community benefits teams, the residents around our plants, to make sure that we honored the commitments that we made in making that investment into the city. It’s been a great relationship with Mayor Mike and as well with the City Council. Everybody has been just fantastic supporting it with regular touch points with residents around our plans to make sure that during construction phase that things are going smoothly for the residents as well.
One of the community benefits was an intestment by FCA into an automotive-focused program at Southeastern High School, which is just a few blocks away from both the Jefferson North and Mack Avenue plants. How do you see this integrating into your long-term recruitment and ability to get east side Detroiters into the pipeline to work at these plants and have careers?
I think it’s just awesome that we can partner with the local high school. Southeastern has been a great partner for us as well as the school board to get that up and running. From the time we had the agreements all set and ready to go, just like construction of the building, we started construction of that relationship with Southeastern High School. … I’m super proud of our leadership team and our team members at Jefferson North. They stepped right in there and helped to make high school internships available for students at Southeastern. … We were able to get roughly a dozen students in who worked with us last summer, some of those are still on with us. We did a tour with … juniors and seniors to come take a look (at the plant). A lot of students, they don’t know, they’ve not been in a big manufacturing and assembly plants like we have — and what a great way to pull people into our industry. I think it’s absolutely critical and it is great in terms of getting folks to think about their careers and which career paths they want to take — whether it is in assembly, whether it’s in stamping, manufacturing and supervision or any of the support staff areas that we have. It’s just a great, great ability to help train folks, give them exposure and give them a start in our industry.
One of the spinoffs from this project is Dakkota Integrated Systems LLC is building a $55 million parts plant at the old Kettering High School on Van Dyke in response to your company’s investment in the city. … Has there been an emphasis on trying to get suppliers to think about reinvesting in Detroit?
It is absolutely really important for us as well to make sure as many of our suppliers can right around our plants. We’re very fortunate we have a lot of suppliers around our plants already, having Dakkota build that new building with another 500-600-plus jobs coming to the city as well and then other suppliers doing the same. We hosted sessions together with the city in terms of areas of opportunity to come in for folks that weren’t there, but continued to encourage our supply base to do that. We’ve got to a really strong program at FCA and it’s something I’m really proud of, it’s called Matchmakers — and that may sound like a dating site and I guess it is to a certain degree in that it’s connecting minority-owned suppliers with our supply base as well as with ourselves with the very specific goal of growing the business we have with minority-owned suppliers here in our areas. And just a quick marketing push for it, we are doing it this year virtually and it’s coming right up here in the next month. And we’re excited to continue it, even if it’s in a virtual way.
Mark, I’d be remiss if we didn’t have a little car talk here for a second. You mentioned the new Grand Wagoneer and Wagoneer that’s coming out of the Warren Truck Plant in the fourth quarter. Longtime Wagoneer enthusiasts want to know why there’s not or is there is a wood trim package to be had from that?
Stewart (laughs): I’ve been watching the blogs on that as well. I would say that we don’t give too many more reveal secrets away of whether we are or whether we’re not until after we get to launching. But I would leave that to (FCA’s global Jeep brand president) Christian Meunier and the brand guys to describe more to the features on it. But I will say I’ve seen some pretty creative drawings and skillsets online with that, for sure.
Well, that’s not a no.
Mark, any closing thoughts about this Mack Avenue project?
My heart on the sleeve, if you will, is I’m so pleased to have joined the company at this time and to have that opportunity to join as we’re able to make this kind of investment in the city of Detroit for the first assembly plant in 30 years down the street from Jefferson North. To have the last two assembly plants (opened in Detroit) and to be able to create 5,000 new jobs in the city of Detroit and already have 1,600 of those folks with offers and 1,000 of them working, I’m just super pleased. And to be able to do this in the time as we’ve gone through the COVID pandemic and to bring all of the plants back up safely, to bring the new plant online safely and to have these new product offerings that our customers have been asking for, I can’t say anything more than we are really excited and looking forward to getting these launched.