Chrysler Breaks Ground For New Axle Plant

The Chrysler Group broke ground today at the future site of the Marysville Axle Plant in Michigan. The automaker’s executives were joined by United Auto Workers (UAW) officials as well as state and local dignitaries to celebrate the $700 million-worth investment in the territory. The new facility will promote the new common axle program of the automaker which is designed to boost overall fuel economy.

The new plant is a semaphore that the ailing automaker, previously owned by Germany’s DaimlerChrysler AG is taking its turnaround plan seriously to yield the cooling breeze of cold air intake to finally enjoy positive results. The turnaround plan of the American automaker seeks to return the company to profitability by next year. The axle plant is part of the Company's "Powertrain Offensive," the company’s $3 billion investment to produce more fuel- efficient engines, transmissions and axles which will be used by Chrysler Group’s product lines.

"The Marysville Axle Plant and other powertrain investments show Chrysler Group's commitment to improving the fuel economy of all of our vehicles," said Frank Ewasyshyn, the Chrysler Group Executive Vice President for Manufacturing. "We are proud to play a positive role in the economy of the State of Michigan, as well as in the City of Marysville."

Chrysler spokesman David Elshoff said that the groundbreaking ceremonies show that Cerberus is committed to Chrysler's restructuring plan, which involves cutting 13,000 jobs but also investments in its facilities. "We said last week that Cerberus was committed to the Chrysler Group's recovery and transformation plan, that the recovery and transformation plan represents our map, or our pathway moving forward," he said.

Elshoff would not say where the other plant investments would be made but said announcements would be made in the coming weeks.

"The investment in Marysville is a great start for the new Chrysler Corporation," said General Holiefield, the UAW Vice President, who directs the union's DaimlerChrysler Department. "It shows that when we work together, we can preserve good-paying manufacturing jobs in the United States."

The Marysville Axle Plant construction will begin this summer. The new facility will employ 900 people when it reaches full volume in 2010. Each year, the facility is expected to produce 1.2 million axles.

"We came together as several separate entities to formulate the requirements necessary to attract Chrysler Group to a project site for their new axle plant," said Gary Orr, the Mayor of Marysville, Mich. "For that we are so very grateful. As a City Council, we are excited and as Mayor of record I am extremely proud, as an administrative team, we stand ready to support the successful future of this great automotive giant."

The Marysville Axle Plant investment will include engineering and development costs. Since 2003, Chrysler has invested $4.4 billion in its Southeast Michigan manufacturing operations. The Detroit Axle plant makes front- and rear-drive axles for many Chrysler truck products as well as trailing axles for Dodge and Chrysler minivans. It also manufactures powertrain components for the Chrysler 300, Dodge Magnum and the Dodge Charger cars, according to the company's Web site.

The Auburn Hills, Michigan-based automaker is eager to show that the company’s new owners are investing in the business as set. Aside from the Marysville Axle Plant, the automaker also plans the construction of a new engine plant in Trenton, which will produce the new generation Chrysler V-6 engine. The Trenton plant will employ 485 workers, the company said. The two plants are part of the $3 billion budget the company will spend this year on factories.

The new axle plant will replace the Detroit Axle plant, which was built in 1917 and now employs more than 1,600, and the engine plant will replace the current engine plant in Trenton which also employs about 1,600 people. The announcements were made by Daimler which last week said it would sell Chrysler to private equity firm Cerberus in a $7.4 billion deal that is anticipated to close in the third quarter.

Chrysler said that in April that it would spend $1.78 billion on transmission and engine facilities, including the Marysville and Trenton plants as well as a new $300 million paint shop at its assembly plant in Sterling Heights and a $50 million in investment in its Warren stamping and assembly complex.