Chrysler set to invest $1.31 billion in 6 Detroit plants 5-year plan includes increased production of Jeep Grand Cherokee

April 10, 1997|By BLOOMBERG NEWS

AUBURN HILLS, Mich. -- Chrysler Corp. said yesterday that it will invest $1.31 billion in six Detroit plants in the next five years, adding "a few hundred" jobs, largely to boost production of its Jeep Grand Cherokee and light-truck engines.

About $750 million of the spending is scheduled for Detroit's Jefferson North plant, the only U.S. facility that builds the Grand Cherokee, one of Chrysler's most profitable vehicles.

The spending on the plant, which opened in 1992, reinforces Chrysler's commitment to the Grand Cherokee and to Detroit, analysts said. The city has been on an economic comeback in the last five years.

The $750 million at Jefferson North will go to a new body and paint shop and allow for increases in capacity. Michael Robinet, an analyst at CSM Forecasting, said the expansion could enable the Auburn Hills-based automaker to churn out as many as 375,000 units a year using three shifts without overtime, which he said would be a 50 percent increase.

Chrysler didn't provide for enough capacity previously, "so they don't want to make the same mistake twice," Robinet said.

Robert Eaton, Chrysler chairman and chief executive, announced the investment plans at the company's Mack Avenue engine plant, where $150 million will be spent to improve technology and increase engine capacity.

"This investment will help continue the momentum that made 1996 our best year in history," Eaton said. "These investments will add a few hundred employees," he added.

The plan calls for Chrysler to spend $300 million at its Detroit axle plant to boost its production as well as to gear up to make axles and other parts for new models.

Chrysler's McGraw glass plant will receive $100 million for expansion and other improvements, while $10 million will go to the Conner Avenue assembly plant for introduction of its long-awaited Prowler convertible roadster, and $3 million will go to a tool and die facility for various improvements.

But at Chrysler's Mound Road Engine Plant in Detroit, hourly workers went on strike at midnight. Both sides are to meet today to schedule further talks on a contract to cover 1,800 members of United Auto Workers Local 51. The plant is the sole supplier of engines for some of Chrysler's popular pickup trucks. Mound Road is the only source of V-8 engines used in the Grand Cherokee.

Pub Date: 4/10/97

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