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Published: Thursday, 8/5/2004

Jeep expansion 3 suppliers to establish series of firsts in Toledo

BY JULIE M. McKINNON
BLADE BUSINESS WRITER

One is gearing up to supply Hyundai Motor Co.'s auto plant opening in Alabama next year.

Another installs manufacturing equipment in auto plants nationwide, using two Michigan facilities to do some final assembly work on production lines for DaimlerChrysler AG and others.

The third designs and builds paint systems at U.S. auto and parts factories and owns other operations nationwide, including an 85-employee operation in Bowling Green that makes industrial filters.

Although South Korea's Hyundai Mobis and Germany's Kuka Group and Durr Group may not be well known in the Toledo area as auto suppliers, they have made strides elsewhere in the United States.

The three were named this week to to supply Chrysler's Toledo Jeep Assembly Plant with complete chassis and painted bodies for the redesigned Wrangler.

They will build and operate three factories at the Jeep complex between Chrysler Drive and Stickney Avenue in north Toledo, the first time suppliers have worked side by side with U.S. autoworkers. The $900 million new factories are to be in operation in 2006.

At Jeep, Hyundai Mobis will for the first time build a complete chassis, Kuka assemble a vehicle body, and Durr man a paint shop in the United States. For all three suppliers, the work at Jeep will be either the first time to provide such extensive services or the company's biggest effort worldwide.

An established Daimler supplier, Durr operates smaller paint shops elsewhere, but the joint supplier-automaker Toledo complex is the wave of the future, said David Meynell, president of a Durr subsidiary in Plymouth, Mich.

"This is a much larger scale," he said. "We're in the right place at the right time."

The three were chosen for 14-year contracts to supply the new plant - and put up a third of its investment costs - as part of Chrysler's $2.1 billion plan to double the number of vehicle models made at Toledo Jeep to four while shifting some production to suppliers.

The global suppliers all do some business with Daimler and were chosen on the basis of quality, technology, price, and expertise, not on nationality, Chrysler officials said. Both automakers and suppliers face competitive pressures on costs, but the relationship at Toledo Jeep makes good business sense, they said.

"It's a tough environment for these suppliers, but they're forward thinkers," said Tom LaSorda, Chrysler's chief operating officer.

Some details of the deals with suppliers have yet to be worked out, Chrysler and supplier officials said. Whether Chrysler or the suppliers will own the shops where the chassis, body, and paint work is done is undetermined, said Durr's Mr. Meynell.

Durr already has a local connection, having bought in 1998 Bowling Green's Henry Filters Inc., which specializes in filters for the metalworking industry. Durr has 4,100 employees in the United States at various locations.

Hyundai Mobis has 320 U.S. employees, most of them in a Montgomery, Ala., factory doing pre-production to supply Hyundai's $1 billion auto plant.

The South Korean company makes parts for current and upcoming Chrysler vehicles, such as the tailgate latch for the Dodge Dakota and the steering column for the new 2005 Jeep Grand Cherokee.

Kuka has 680 U.S. employees, and it builds, but doesn't operate, vehicle body shops for the Big Three and other automakers. The company does production work for Ford Motor Co. in Germany and is working on a relationship with Chrysler in Mexico, said Larry Drake, president and chief executive of Kuka's subsidiary in Sterling Heights, Mich.

Contact Julie M. McKinnon at:

jmckinnon@theblade.com

or 419-724-6087.



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