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Published: Tuesday, 7/13/2010

Chrysler delays Toledo expansion; hundreds of local jobs hinge on plan

BY LARRY P. VELLEQUETTE
BLADE BUSINESS WRITER
The Alfa Romeo Giulietta uses Fiat SpA's new vehicle platform, on which the next-generation Jeep Liberty is to be based. Jeep Liberty is made at the Toledo North Assembly plant. The Alfa Romeo Giulietta uses Fiat SpA's new vehicle platform, on which the next-generation Jeep Liberty is to be based. Jeep Liberty is made at the Toledo North Assembly plant.
MARTIN MEISSNER / ASSOCIATED PRESS Enlarge

Plans by Chrysler Group LLC to add vehicles and expand production at its Toledo North Assembly Plant have been delayed while the automaker decides how a plant in suburban Detroit fits into its long-term product plans, The Blade has learned.

Sources have confirmed that the automaker is studying whether it should build small and midsized vehicles at just two plants, Toledo North and Belvidere, Ill., and use three daily shifts at each plant. Or if it should build cars at three plants, Toledo, Belvidere, and Sterling Heights, Mich., and run two shifts a day at each plant.

The final decision puts hundreds of jobs in the balance for metro Toledo.

A spokesman for Chrysler declined to comment.

"They're looking at a three-plant competition between three states," said Sean McAlinden, executive vice president of research and chief economist for the Center for Automotive Research in Ann Arbor. "All the old things are being looked at: the paint shops, the labor [agreements], how close the plants are to suppliers. It's guaranteed that two of the three plants will get product, but Chrysler probably wants statewide deals for all these plants."

The Blade first reported in February that Chrysler was looking to expand its manufacturing operations at Toledo North Assembly, where about 950 employees build the Jeep Liberty and Dodge Nitro midsize sport utility vehicles on one shift.

Workers at the Toledo North Assembly plant began a two-week summer shutdown yesterday.

Chrysler's plans called for an expansion to three shifts as the Toledo plant changes from building two midsized SUVs to assembling three, four, or five different small and midsized vehicles based on the same platform.

Chrysler said in November that the next-generation Jeep Liberty will be based on partner Fiat SpA's next-generation C-evo vehicle platform. The new Alfa Romeo Giulietta, introduced in March at the Geneva Motor Show, is based on that platform.

Last week, Chrysler told Illinois officials it will build a 500,000-square-foot body shop at the Belvidere Assembly Plant, which now assembles the Jeep Compass and Patriot and the Dodge Caliber.

The Sterling Heights Assembly Plant in suburban Detroit now builds Chrysler Sebring and Dodge Avenger sedans and the Sebring convertible. When Chrysler went through bankruptcy in 2009, it relinquished the Sterling Heights plants but bought it back this year for $20 million from its bankrupt entity, OldCarCo.

Haig Stoddard, an automotive industry analyst for IHS Global Insight in suburban Detroit, said Chrysler is just "keeping their options open" by reconsidering how to allocate production of its mid-sized vehicles.

"I think what the plan would be was Toledo and Belvidere would have different vehicles off the same platform. Sterling Heights would be overflow capacity beyond what Toledo and Belvidere could do," he said.

Ohio development officials had been expecting a Toledo announcement from Chrysler last September. In February, Gov. Ted Strickland said the state was continuing to talk to the automaker.

City officials confirmed meeting with Chrysler at the Toledo Assembly Complex within the last several weeks to discuss future plans. However, state and local officials said Chrysler has not asked for any added information nor sought incentives to move forward with expanded production in Toledo.

"We're doing all we can to be open, to say, 'We are here to do all we can to help you.' Other than that, that's all we can do," said Dean Monske, deputy mayor for external affairs. "There have been no requests made, but we're ready to help in any way we can."

Contact Larry P. Vellequette at:

lvellequette@theblade.com

or 419-724-6091.



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