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ITA ENG

BORSA ITALIANA

EUR 13.442 -2.34 %

NYSE

USD 15.51 +0.13 %

ITA ENG

Pernambuco, Brazil

Pernambuco, Brazil Pernambuco, Brazil

An ambitious project

FCA is dedicating the maximum in know-how and resources to the construction of the new Jeep plant in Goiana, in the State of Pernambuco in Brazil, which will be the most technologically-advanced and sustainable Group plant in the world.

Construction began on the new plant in September 2012 and when completed it will form the center of a highly-integrated automotive hub. That hub will consist of the plant, the Group’s most advanced and efficient World Class Manufacturing site, as well as an R&D center, training center, proving ground and on-site supplier park.

Pernambuco at a glance

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This project represents a strategic investment for the Group and the State of Pernambuco and forms part of a comprehensive program of industrialization being implemented by the government to support economic and social development for the entire region. The initiative also demonstrates the level of FCA’s social and cultural integration in Brazil, where it is seen as a local player and recognized for the innovative choices that have enabled it to respond rapidly to the market and grow together with the local economy.

The plant in Pernambuco represents a very important step for the Group in strengthening its international activities. Brazil is strategic to our expansion in Latin America. It is also the Group’s objective to contribute further to the economic, technological and industrial development of Brazil, where we have been present for almost 40 years.

Sergio Marchionne, CEO of Fiat Chrysler Automobiles N.V.

Fiat was the first automaker in Brazil to establish manufacturing activities outside the industrial belt of São Paulo. Since opening in 1976, the Betim plant has made a vital contribution to the industrial and economic development of the State of Minas Gerais and, through the strong relationship built with the community, Fiat has also made a major contribution to the economic and social development of the local area.

Fiat in Latin America

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New opportunities and challenges for local stakeholders

Construction of the new site has so far involved more than 7,000 workers. FCA has worked with the Brazilian government and local authorities to ensure implementation of the most advanced technological standards as well as establishment of an active dialogue with local stakeholders that is vital to the success of the project.

Involving local stakeholders from the very beginning of the project was instrumental in achieving consensus in all areas and establishing credibility and respect for the Group. In collaboration with AVSI Nordeste (a local NGO), the Group assessed the potential social, cultural, economic and environmental impacts of the planned industrial activities on Goiana and the 17 neighboring communities. The results of the assessment were used to identify initiatives to address specific social and environmental needs. In 2012, prior to start of construction, the project and related environmental impacts were presented to a group of more than 800 people representing the community various interests. That initial meeting represented the beginning of the engagement process which continues today.

Fiat and the State of Pernambuco have established a lasting, productive and transformative relationship that will benefit the economy and society as a whole. We are giving a formal start to a new phase in the 37-year history of Fiat in Brazil and, at the same time, we are making a very important contribution to the development of Pernambuco.

Cledorvino Belini, Chairman, Fiat Latin America

The Pernambuco Industrial project is the biggest project ever accomplished by FCA in Brazil. The Jeep plant is already been developed by the strong knowledge there is in WCM (world class manufacturing) generated inside the organization around the world. An example of it is the use of more than 15.000 practices, already applied on the Fiat Chrysler Automobiles’ plants, also counting as a support of an integrated supplier park. The partnership with the Government has been of great value and has allowed the creation of countless opportunities for the region, boosting its economic, social and technological development. It is the beginning of a new phase of Fiat Chrysler Automobiles in Brazil.

Stefan Ketter, Chief Manufacturing Officer, FCA S.p.A.

The project will have a positive and far-reaching impact on the local economy, which historically has been agriculture based and predominantly in sugar cane production. Potential benefits include higher income levels for an increasing number of families. The plant will also provide job opportunities to young people from the area who may have been considering moving out of the local area in search of employment.

The government of Pernambuco collaborated with the city of Goiana and neighboring cities to recruit workers from the surrounding area, giving priority to local residents. As a high percentage of the local workforce comes from the agricultural sector, training courses, coordinated by the Brazilian government, have been established to prepare future employees to work at the plant.

Approaching completion

The project is progressing rapidly with around 80% of the main factory already completed. Stage two – which involves installation of utilities (water, energy, gas, etc.) – is also well advanced.

Completion of the Paint Shop, Press and Body Shop is scheduled for June 2014, while the Assembly and Communication Center buildings are scheduled for completion in August. It is expected that both the plant and supplier park will be ready for inauguration in first quarter 2015, with production of the first model, the Jeep Renegade, beginning in early 2015.

Two additional models will follow in 2015 and 2016.

Local production of Jeep models at the Pernambuco plant will help to strengthen and differentiate the Group’s product offering in Brazil with attractive vehicles that deliver world-class quality and environmental performance. In addition, the plant will generate efficiencies and reduce overhead costs by utilizing the Group’s global platforms and optimizing its environmental footprint.

A model of integrated product development and production

The Pernambuco plant was designed to be flexible and adapted for production of several different models. The plant also has a unique layout that was designed to enable rapid decision-making and efficient sharing of know-how and best practice between production areas. The Communication Center, which includes a Metrology Lab and Simulation Room, forms the central hub of the plant where all vehicles pass through after each major phase of production.

The operational design of the plant is based on know-how and experience developed from extensive company-wide knowledge in World Class Manufacturing, which is recognized as one of the most advanced manufacturing methodologies internationally.

More than 15,000 practices were leveraged to optimize logistics flows and ensure the highest quality standards for the vehicles produced. The successful “team leader” centered organization used at other Group plants will also be adopted.

The presence of an on-site R&D Center also means that the Pernambuco plant will be an important component of the FCA’s innovation and engineering activities. Initially the Center will focus on development of virtual and physical validation processes relative to local production and experimental designs developed for the automotive hub in Goiana. Once fully operational, it will have a strategic role for the region and will become more fully integrated with Group’s global R&D network.

The Center will bring together engineers, researchers and technicians potentially employing up to 500 professionals over the coming years. FCA has signed an agreement with SENAI Automotive College to train personnel for the new site.

The Group’s greenest plant

Pernambuco will adopt the most advanced production methodologies, processes and logistics, making it highly efficient and minimizing the impacts on the environment. Examples include the high-efficiency body shop robots made by Comau (a Group company) and the decision to use a compact paint booth design which requires less space and also helps reduce emissions.

Responsible waste management and disposal, low energy consumption and CO₂ emissions and water recycling are also examples of the Group’s commitment to protecting the environment. The rigorous standards and best practice of World Class Manufacturing and the Group’s Environmental Management System will be implemented at the Pernambuco plant. The environmental impacts of the plant were analyzed during the design and planning phase and environmental performance will continue to be monitored regularly as at all Group plants worldwide.

Working even closer with suppliers

A 270,000 square meter integrated supplier park is also being constructed next to the main plant. A current total of 16 suppliers will produce 17 lines of components on-site, enabling a high level of vertical integration and meeting some 40% of the plant’s components requirements. Around 2,000 new jobs will be created by year-end 2014, of which more than half will be with suppliers located on-site.

New training and employment opportunities

A significant number of non-manufacturing jobs will also be created at the plant, including administrative, management and technical positions. Priority will be given to attracting talent from Pernambuco and other States in the Northeast of Brazil.

The Group has established a training center that will offer both basic technical development and customized automotive training. Initiatives are already underway to develop proficiencies and transfer knowledge from other areas of the Group. One initiative involved 100 future employees visiting the Group’s Melfi plant in Italy to undergo on-the-job training on the Jeep Renegade production line.

It is a unique opportunity to work in a company of this size and, in addition, to be given the opportunity to go through a training program abroad.

Juliana Alvarez, 24 years old, Paint Shop Supervisor

A resident of Olinda, where she was born, Juliana has a degree in Chemical Engineering from the Universidade Católica de Pernambuco. This is her first job. She feels prepared for the challenge having completed four months of training at the Group plants in Pomigliano, Cassino, Melfi (all 3 in Italy) and Kragujevac (Serbia).

Equally enthusiastic about this opportunity, but with a different profile, is Edmilson Pereira Soares, 43 and married with two children, who worked on installation of a line of presses, the largest pieces of equipment in the plant.

Born and raised in Goiana, Edmilson formerly sold clothes and other merchandise door-to-door and occasionally worked as a painter. Now he is a trained professional proud of his new role as general assistant in the Press Shop and, for the first time in his life, also has access to benefits related to the formal work, taking part of the whole social welfare policies.

As a sign of the new plant’s importance for the region, local universities presented management with CVs of their best students for consideration for positions at the plant.

Under an international study program, 10 Brazilian engineering students have been given the opportunity to study at the Politecnico di Torino in Italy, which ranks as one of Europe’s top technical schools. Upon successful completion of their studies, the students will be offered a position at the Pernambuco plant.

Updates on the activities at Pernambuco will be provided over the coming months. Additional information can be found here.

May 2014