Fiat Chrysler also will spend more than US$1 billion and add 2,500 jobs at a factory near Detroit to produce heavy-duty Ram pickups that the company been making in Mexico.
The Auburn Hills-based company said the Saltillo truck assembly plant will be repurposed to produce future commercial vehicles for global markets.
What's more, FCA said it would pay a $2000 bonus to 60,000 hourly and salaried employees, which the company said was made possible by a huge corporate tax cut enacted late previous year.
"These announcements reflect our ongoing commitment to our US manufacturing footprint and the dedicated employees who have contributed to FCA's success", said Sergio Marchionne, Chief Executive Officer, FCA in a statement.
That $3.5 billion investment and related actions involved production shifts at three plants in Illinois, Ohio and MI to gain capacity for the Jeep Cherokee, Jeep Wrangler and Ram Light Duty truck, as well as the introduction of three new Jeep models at plants in Ohio and MI.
FCA credited the recently-passed tax reform legislation for these decisions.
The Italian-American automaker will share the spoils of a lower corporate tax rate by sending US$2,000 checks to about 60,000 USA workers.
The move also comes amid continued negotiations over North American Free Trade Agreement negotiations.
The plan includes a total of 60,000 workers, excluding senior leadership.
FCA's initial investment in Warren for the Wagoneers was announced in January 2017.
$1 billion in the south plant of the Toledo Assembly Complex to prepare the facility to produce an all-new Jeep truck, and in the Warren Truck Assembly Plant to modernize the plant to build the all-new Jeep Wagoneer and Grand Wagoneer.
- Wal-Mart Stores Inc, the nation's largest private employer, on Thursday, announced that it will use some of its savings under the new tax bill to provide wage increases, bonuses and expanded benefits to its hourly workers.
Vice President Mike Pence praised Fiat Chrysler's announcement.
The investment "is a hedge by FCA against the increasing likelihood that Nafta will be dropped or renegotiated to favor manufacturing in the U.S.", Erik Gordon, a professor at the University of Michigan's Ross School of Business, said in an email.