New Chrysler axle plant will supply Mercedes

David Barkholz
Automotive News
May 21, 2007 - 3:01 pmMARYSVILLE, Mich. -- The Chrysler group's $700 million axle plant to be built here will supply rear-drive axles to Chrysler and Mercedes-Benz, officials said today.

The Marysville axle plant is scheduled to open in 2009, and construction begins this year. The plant, about 55 miles northeast of Detroit, will have about 900 workers and the capacity to make slightly more than 1 million axles a year.

The axles will be used in light trucks, Chrysler executives said. That also will allow them to supply the Mercedes' plant in Vance, Ala., which builds the M-class crossovers and GL-class SUVs.

Officials from Chrysler, the UAW and local government held a groundbreaking today. The ceremony comes a week after Cerberus Capital Management LP announced plans to acquire the Chrysler group from DaimlerChrysler AG.

Axles are a component that many automakers find easy to buy from outside suppliers. But Chrysler has proprietary technology, including lightweight axles and precision gear grinding, that it wants to keep, said Frank Ewasyshyn, Chrysler group manufacturing chief.

The Marysville plant will replace Chrysler's Detroit axle plant, which has about 1,400 employees.

General Holiefield, head of the UAW's Chrysler department, said much of the employee reduction will be covered by attrition and early retirement programs offered by Chrysler.