Thursday, August 14, 2008

Chrysler to build fuel efficient Grand Cherokee

Tom LaSorda
2009 Dodge Ram priced at $22,170

TRAVERSE CITY, Mich. -- Chrysler LLC will make its next-generation Jeep Grand Cherokee in 2010 with a unibody construction and a fuel-efficient V6 engine being developed under codename Phoenix, Chrysler Vice Chairman Tom LaSorda told a media gathering here today.

The automaker plans to spend $1.8 billion to refit its Jefferson North (Detroit) Assembly Plant to produce the Grand Cherokee and other undisclosed products off the same platform, LaSorda said.

Chrysler worked with Mercedes jointly on development of the platform, LaSorda said. However, any products Mercedes would create from the development work would be distinctly its own, he said.

LaSorda spoke earlier this morning at the Management Briefing Seminars.

The expanded Detroit plant will be flexible to allow multiple vehicle models to be built on the same assembly line, LaSorda indicated. The expansion adds 285,000 square feet.

In prepared remarks for his speech this morning, LaSorda said the expansion and new vehicle program will help create 400 new jobs in Michigan.

The plant today builds the Jeep Grand Cherokee and the Jeep Commander.

LaSorda also said Chrysler has identified $1 billion in non-earning assets it plans to sell.

"One advantage of private ownership is that we can sell non-earning assets to generate cash," LaSorda said. "To date, we have identified over $1 billion in assets, and we are more than half way to achieving that goal."

LaSorda said the automaker so far has sold over $500 million in assets, including land around its headquarters in Auburn Hills, Michigan, and its Tritec engine plant in Brazil.

In another announcement, LaSorda said the all-new 2009 Dodge Ram pickup would be priced at $22,170.

That's a drop in price from last year's model. A 2008 Ram with a similar set of features had an MSRP of $23,050 and didn't include an automatic transmission, which a Chrysler spokesman said will come standard on the new Ram.

"We've already announced that the light-duty Ram will soon add a clean diesel and hybrid powertrain choice," LaSorda said.

During a subsequent luncheon briefing with reporters, LaSorda added that Chery Automobile is making a number of engineering changes to a small car that it is developing jointly with Chrysler.

"Our engineers are estimating that it can be ready by the end of the year," LaSorda said. "We'll see. We are not going to put a nameplate on it until we can rest assured that it meets our standards."

The subcompact car could be ready for sale in 2009, LaSorda added.

And in other news, LaSorda confirmed that Fiat had held talks with Chrysler to discuss the sharing of vehicle production in North America. "At this stage, there are no formal discussions going on" with Fiat, LaSorda added.

Fiat CEO Sergio Marchionne, credited with steering a turnaround behind the Alfa Romeo, Lancia and Fiat brands, has said Fiat is looking for a partner for its return to the North American market.

LaSorda said Fiat has approached many other companies, too.

"We are not the only ones," he said.

Reuters reported last month that Chrysler was in talks with Fiat with the aim of leasing manufacturing capacity and sharing retail distribution, which would allow the Italian automaker to return to the U.S. market for the first time in 25 years.

Chrysler is also in discussions with India's Tata Motors Ltd about selling its Jeep Wrangler SUV in India and possibly other Asian markets, sources have said..

"When we look at alliances in different regions, we have had discussions with multiple companies in Russia," LaSorda said. "In India we have had discussions with many companies."

LaSorda, who declined to name the companies, said the automaker may decide on a Russian partner by the end of this year.

David Sedgwick, Andrew Grossman, and Reuters contributed to this report

PRESS RELEASE: Chrysler LLC Invests in New Products and Future Production at its Jefferson North Assembly Plant in Detroit

- Plant investment for newly designed body shop, upgrades to paint, assembly areas

- New generation of world-class vehicles to be built in Detroit

- Extensive green initiatives, while adding greater manufacturing flexibility and capability

- Chrysler maintains its position as a leading employer in Detroit and Michigan

TRAVERSE CITY and AUBURN HILLS, Mich., Aug. 13 /PRNewswire/ -- Chrysler LLC announced today that it will invest approximately $1.8 billion in new vehicle programs, including a significant expansion and upgrade at its Jefferson North (Detroit) Assembly Plant to ready it for future production, starting in 2010. The announcement was made by Tom LaSorda, Chrysler LLC Vice Chairman and President, during a speech at the 2008 Management Briefing Seminars in Traverse City, Michigan.

"This investment in our future products and at Jefferson North will enable the Company to produce a future generation of vehicles more efficiently, with world-class quality and an improved environmental footprint," said Tom LaSorda. "Furthermore, this commitment reinforces the long-standing partnership between Chrysler LLC, the City of Detroit and the State of Michigan."

"A strong Chrysler is important for Michigan and Michigan workers, and we are pleased to cooperate with them on this project," said Governor Jennifer Granholm. "This expansion will continue a valuable, long-term partnership that has helped keep Michigan the automotive capital of North America."

Plant and Product Advancements

The total program investment will go towards product development functions, as well as new, state-of-the-art manufacturing systems in the plant. This investment provides for the design, development, components and supplier support associated with the new vehicle programs.

"We believe the Jefferson North makeover will give the facility and our Company the upper hand on how responsive we can be to shifts in consumers' needs and changing market demands," said Frank Ewasyshyn, Chrysler LLC Executive Vice President of Manufacturing. "We also believe this will be achieved while continuously improving the quality of our vehicles that will be produced in Detroit."

Jefferson North will undergo a 285,000 square foot building expansion to replace the existing body shop, which will give the facility an all-new level of manufacturing flexibility for multiple product capability. In addition, changes throughout paint and assembly operations will accommodate vehicles of various sizes and dimensions. Material handling and other plant functions also will be improved.

Plant employees will benefit from new levels of involvement and training to help complete the plant transformation. Much of the critical work required for facility and equipment preparation and installation will be accomplished by employees from the plant, a result of collaborative work between Chrysler and the UAW.

"This is an important day for the future of the UAW and Chrysler LLC, and we are pleased to partner with Chrysler to help maintain jobs in Michigan," said General Holiefield, UAW Vice President and Director for the Chrysler Department. "Although we are in the midst of challenging times, the strong relationship between Chrysler and the Union will contribute toward our long-term success."

Green Initiatives

Multiple "green" initiatives will be employed at Jefferson North. Each of these additions will result in energy savings, as well as a brighter, cleaner and more ergonomically sound workplace for employees. Plus, these advancements will improve the environmental footprint of the facility by reducing carbon emissions, solid waste and raw material consumption while also helping to green the outside grounds of the plant. These include:

-- Energy-efficient fluorescent lighting fixtures and a state-of-the-art energy management system;

-- Air filtration systems to improve employee comfort and workplace cleanliness;

-- Decanting technology, which will utilize paint sludge as an energy source, reducing emissions and solid waste;

-- Electric-servo weld guns in the new body shop to improve welding quality for the vehicle bodies, while also producing quieter operations;

-- Replacing unused asphalt parking areas with grass to reduce heat generation and improve appearance;

-- Utilizing reusable paint clips that hold doors in place during the paint process and reusing parts racks, resulting in a reduced raw material consumption; and

-- Trailer cubing and rack density improvements to reduce fuel consumption and transportation costs.

The energy savings resulting from the sludge operations, filtration systems, lighting and servo welding alone are anticipated in total to save several dollars per vehicle built, while helping to have a cleaner, brighter workplace.

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