Tuesday, May 15, 2007

Belvidere changes seen as unlikely


By Rick Popely
Tribune staff reporter
Published May 15, 2007

Chrysler's assembly plant in Belvidere, Ill., which received a $419 million overhaul two years ago, ranks among those most likely to remain in business under the automaker's new owner, Cerberus Capital Management LP.

"Belvidere is a key assembly plant that recently received a significant investment in a flexible manufacturing system, and it looks viable short term and long term. I don't see that changing," said Catherine Madden, an analyst with industry forecaster Global Insight.

The Belvidere plant employs 3,800 on three shifts and builds three models: the Dodge Caliber, Jeep Compass and Jeep Patriot.

All three are fuel-efficient, car-based vehicles styled to look like sport-utilities, and all are exported as well as sold in the U.S.

Caliber has sold more than 36,500 units through April this year, up from some 19,100 a year earlier. Compass and Patriot, new for 2007, have sold 15,000 and nearly 6,000, respectively, with no year-earlier figures.

Before the flex system was installed, the plant operated on one shift, employed 1,650 and built only the Dodge Neon sedan.

"We expect it to be business as usual at Chrysler and at Belvidere, which is poking out the right new products now," Chrysler spokesman Mike Aberlich said.

Though the three are similar under the skin, they look different and are aimed at different buyers.

In this way, flex manufacturing allows production to be shifted to the better-selling vehicles.

Global Insight says Chrysler is designing new versions of the Caliber and Patriot, which indicates the plant remains in Chrysler's long-range plans.

Other plants, such as those that make mini-vans and the Dodge Ram full-size pickups, are "more vulnerable" because demand is dropping and Chrysler can consolidate production of those vehicles, Madden said.

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