Chrysler is driven to invest in Kenosha plant

Wednesday, June 13, 2007 11:19 PM CDT

wwBY MICHAEL BURKE

Journal Times

KENOSHA - A $450 million investment in the Chrysler engine plant here will keep the factory humming well into the future and ensure about 700 full-time jobs.

Chrysler, recently split off from the former DaimlerChrysler, announced Wednesday its plans to invest in the Kenosha engine plant as part of a $3 billion recovery plan. The plant will be retooled starting in June 2010 and start making the new Phoenix V-6 engine in January 2011.

Numerous government and United Auto Workers officials, including Gov. Jim Doyle, participated in the press conference. The room was also half-filled with other union members who applauded heartily and often during the press event.

Afterward, Tim Moore, a 34-year employee of the auto plant, said that when DaimlerChrysler recently sold 80 percent of Chrysler to Cerberus Capital Management, "We were very apprehensive at the time. We didn't know much about the people who were buying us."

For that reason, Moore, a quality control technician, considered Chrysler's announcement very good news. "The important thing is they're not closing the plant."

"The work ethic here is what brought the engine here," he added.

The changes will actually mean a net loss in jobs, from about 900 now to about 700 when the Phoenix is in full production.

"Obviously, we're not happy about it," said Dan Kirk, president of UAW Local 72 at Chrysler. "... I would like 20,000."

However, he said he hopes that Chrysler will do well and the plant will expand its work force over time.

The Kenosha plant will produce 400,000 engines per year at full production, company officials said.

It is the third engine plant identified by Chrysler for production of the Phoenix. The auto maker has also announced it will build a new facility on land it has in Saltillo, Mexico, and will expand its factory in Trenton, a suburb of Detroit.

A better engine

The Phoenix family of engines, which are now in the designing and testing stage, will be lighter in weight and more fuel efficient, said Richard Chow-Wah, Chrysler's vice president of power train manufacturing.

Chrysler will also make the Phoenix as a four-cylinder engine, but, "Our customers still want V-6s," Chow-Wah said, and Kenosha was chosen to make the Phoenix family of V-6s.

Chrysler said the program will reduce manufacturing complexity by paring its four current V-6 engines to one.

Doyle said Wednesday that he met with DaimlerChrysler Chief Executive Officer Thomas LaSorda last year and urged him to make a major investment in the Kenosha plant.

The eventual public-private partnership includes a $16.8 million incentive package - primarily for rebuilding infrastructure for the plant - from the state, city of Kenosha and Kenosha County combined.

Chow-Wah said the new majority owners of Chrysler came along as the deal was being woven together. "It was all in the works before the sale. The new owners saw the advantage in what we were doing."

Chow-Wah said that "2010 seems a long way away, but the work starts now."

The Kenosha deal is part of a larger, $3 billion investment in power trains that is central to Chrysler's recovery plan. The initiative also includes a dual-clutch transmission joint venture with German parts maker Getrag and a new common axle family.

"All are part of Chrysler Group's commitment to advanced power train technologies and the first step to more fuel-efficient vehicles," the company stated in a news release.

It was 20 years ago when Chrysler Corp. bought American Motors Corp. The auto assembly line was closed, dispatching almost 5,000 workers.

"We have been fighting back since 1988 when they closed production of the assembly line," Kirk said, and the factory became strictly a maker of engines.

But Wednesday, Chrysler was the hero. In his remarks, Kenosha County Executive Allan Kehl referred to the company as "DaimlerChrysler - now Chrysler, thank God."

Special Offer: Get 5 Weeks of the Journal Times for $7!