Week of March 28, 2005
  Blockbuster Deal

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Chrysler Follows Suit
in Michigan With
$506-Million Investment

L-R Frank Ewasyshyn, Executive Vice President of Manufacturing for the Chrysler Group, Tom LaSorda, Chief Operations Officer for the Chrysler Group, and Michigan Governor Jennifer Granholm participate in the Chrysler Group's announcement of the more than half-billion dollar investment in the Sterling Heights Assembly Plant and the Sterling (Heights) Stamping Plant on March 22, 2005, in Sterling Heights, Mich. The upgrades will make the plants more flexible and efficient, and ready them for their role in Chrysler Group's ambitious future product strategy.

by ADAM BRUNS,
Site Selection Managing Editor


The bad news? Chrysler is having to replace 670 material handlers and welders at its Sterling Heights, Mich., assembly (SHAP) and stamping plants. The good news? They're robots.
    The robotic investment is just part of US$506 million in capital that DaimlerChrysler's Chrysler Group is spending on upgrading the two facilities to make them more flexible and efficient, thereby preserving more than 5,000 jobs.
    "Production lines at the assembly plant will be able to produce multiple vehicles, and the stamping plant will be able to produce multiple assemblies on the same line," said Tom LaSorda, COO of the Chrysler Group, at the company's March 22 announcement.
    Recent agreements with UAW-represented employees cleared the way for the investments and also for new operating principles, read a company statement. If that refrain sounds familiar, it's because it was the same song being sung recently in Belvidere, Ill, where the Chrysler Group is also making a major upgrade to the tune of $419 million and 1,000 new jobs.
    The Chrysler Group investment also comes on the heels of big Michigan investment announcements by GM and Ford in January 2005, saving another 7,500 jobs.
    "Today's announcement is indicative of what is possible when all of us — state and city officials, Chrysler Group management, UAW leadership and the SHAP and Stamping Plant employees — work together for a common goal," said Nate Gooden, UAW Vice President for DaimlerChrysler. "Looking forward, I am encouraged by the commitment to the training of management and UAW members in support of a team-based work-force organization, which will help ensure job security in the future."
    Team-based funding doesn't hurt either. In February 2005, the Michigan Economic Development Corp. approved a Single Business Tax credit valued at approximately $18.8 million as well as an Economic Development Job Training Grant valued at $500,000 to win the project. The city of Sterling Heights approved abatements of the company's new personal property taxes totaling more than $17.8 million for the stamping and assembly facilities.
Plant workers attended more than 340,000 hours of training to prepare for the introduction of the Cirrus-Stratus line. Most of the training took place at the plant's own training center.

Flex Flies High
    SHAP will see a $278-million investment that includes paint and body shop overhauls, as well as about 620 new robots within its 3 million sq. ft. (278,700 sq. m.). That's a significant rise in the current robot population of 393. The plant will build the replacements for the Chrysler Sebring and Dodge Stratus, and have the ability to produce the replacement for the Dodge Neon, should market demand lead to that in the future.
    The upgrade is merely the latest chapter in the plant's many-lived history. Built in 1953 as a jet engine plant, the facility was converted to an automotive plant in 1983 by none other than Volkswagen. Chrysler bought it in 1983.
    Meanwhile, the 40-year-old Sterling Stamping Plant will see a $228-million investment that replaces a mere 50 robots, and incorporates new lean die standards that will reap a 45-percent cost savings over current standards and processes, said the company.
    "The new CSA lines allow for greater flexibility by enabling more than one product to be welded and assembled on the same line, while also reducing waste and improving quality," the statement continued. "CSA lines can support the manufacture of multiple products and one pilot product at the same time — a significant improvement from the one line, one product standards of the past."
    A University of Michigan economic analysis estimates that 15,659 indirect Michigan jobs will be retained as a result of increased economic activity associated with DaimlerChrysler's investment.
    Meanwhile, over in Illinois, the evidence that flexibility pays off was mounting. Only one day after the Michigan announcement, three key suppliers to the expanding Belvidere plant — Johnson Controls, Grupo Antolin and Android Industries — announced they would co-locate to Belvidere, moves that will bring 550 new jobs to the state, as well as significant facility investments.
    The Chrysler Group has invested nearly $5 billion in its manufacturing facilities in the past two years, including major renovations at Belvidere Assembly, Brampton Assembly, Jefferson North Assembly, Newark Assembly, Saltillo Assembly, St. Louis South Assembly, Toledo Assembly, and Warren Truck Assembly.




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