Chrysler Outlines $1.78-billion Investment Plan

April 20, 2007
Projects include new engine plant for latest V-6 platform

April 20, 2007 — Amid ongoing sale talks, DaimlerChrysler AG's Chrysler Group is moving forward with a $1.78-billion capital improvement program in Michigan, involving two new plants and significant improvements to existing operations. The plans are details that follow the group's "Recovery and Transformation Plan," outlined in February.

Specifically, Chrysler plans to build a $730-million plant in Trenton, MI, to manufacture its next generation V-6 engine, the Phoenix, a common six-cylinder design to replace four six-cylinder engine platforms being produced now at three different sites in the U.S. The new six-cylinders — all aluminum, dual-overhead cam, and four valves per cylinder — are one element of Chrysler's $3-billion strategy to modernize its powertrain systems, and build on lessons learned from the Global Engine Manufacturing Alliance, from which it sources its four-cylinder engines.

The new engine plant at Trenton will be adjacent to, not replacing, the existing Trenton engine plant — though that may happen eventually. Currently Trenton manufactures some V-6 engines for minivans and SUVs.

Chrysler also will build a $700-million axle plant in Marysville, MI, to replace the Detroit Axle operation. And, it will build a $300-million paint shop in Sterling Heights, where Chrysler Sebrings and Dodge Avengers are assembled; and invest $50 million at the Warren stamping and assembly complex, where Dodge Ram and Dakota pickup trucks are built.

DaimlerChrysler is known to be in talks with private equity groups and at least one manufacturing concern, Aurora, ON-based Magna International Inc., concerning a sale of Chrysler Group. The group's leadership maintains that regardless of sale talks, the organization must modernize its facilities to become more competitive.