Chrysler Group is planning to build two plants in Michigan to make the US automaker’s next generation V-6 engines, a published report said. According to state and company officials Chrysler Group is set to unveil plans to build two new plants in Michigan as part of a planned $3-billion investment in more fuel efficient vehicles.
The proposed plant, in Trenton, near Detroit, would manufacture the V-6 engines, code-named Phoenix, for Chrysler, Dodge, Jeep and Mercedes vehicles by 2010. Trenton has offered Chrysler $62 million in incentives to build a new plant there. In addition to it, The Michigan Economic Growth Authority has also approved tax credits worth $11.2 million over nine years to make a comfortable way for the factory.
According to reports, Chrysler also is also likely to announce plans to build a $700 million axle plant in Marysville, Mich., northeast of Detroit, which will generate 900 jobs, the News and Detroit Free Press reported. The new plant will replace the Detroit Axle plant, built in 1917, which employs around 1,600 jobs. Some analysts had thought that American Axle might be able to pick up part of Chrysler’s share of the axle market, but the construction of the new plant appears to make that less likely.
The announcement of setting up plants is definitely a significant boost for both the unsettled Chrysler unit and the State of Michigan. Chrysler had reported a $1.5 billion loss in 2006, and now looking to revamp its vehicle lineup in order to boost market share and profits. The $3 billion powertrain investment is a critical element in Chrysler’s effort to achieve long-term viability.
Chrysler spokeswoman Michele Tinson said, ‘This is part of our recovery and transformation plan’, and refrained from divulging information that how much Chrysler will spend on the two plants.
In fact its not that only Chrysler is facing problem in US at present of high labor costs and slumping market share but it also faced by other domestic competitors General Motors Corp and Ford Motor Corp. Every firm of the Big Three is in the middle of wide-ranging restructuring plans that are damaging Michigan, which is where each of the auto makers are based. In recent time, following their restructuring and cost cutting plans the auto makers have cut thousands of white-collar jobs in Michigan in addition to tens of thousands of hourly jobs.
