ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Thursday, April 10, 1997 TAG: 9704100053
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
DATELINE: AUBURN HILLS, MICH.
SOURCE: BLOOMBERG NEWS
The company has the most aggressive second-quarter production schedule among U.S. automakers and plans to boost U.S. truck production 13 percent.
Chrysler Corp. said Wednesday it would invest $1.31 billion in six Detroit plants in the next five years, adding ``a few hundred'' jobs, largely to boost production of its Jeep Grand Cherokee and light-truck engines.
About $750 million is slated for Detroit's Jefferson North plant, the only one in the United States that builds the popular Grand Cherokee, one of Chrysler's most profitable vehicles. The spending on the Jefferson plant, which opened in 1992, reinforces Chrysler's commitment to the Grand Cherokee and to Detroit, analysts said. The city has been on an economic comeback in the past five years.
The move demonstrates ``that their products are going to continue to be competitive over the long term and they have a clear commitment to the Detroit area,'' said Nick Lobaccaro, an analyst at Bear, Stearns & Co. in New York.
The $750 million at Jefferson North will go to a new body and paint shop and allow for increases in capacity. Michael Robinet, an analyst at CSM Forecasting, said the expansion could enable the automaker to churn out as many as 375,000 units a year using three shifts without overtime, which he said would be a 50 percent increase.
Chrysler didn't provide for enough capacity previously, ``so they don't want to make the same mistake twice,'' Robinet said.
Robert Eaton, Chrysler chairman and chief executive, announced the investment plans at the company's Mack Avenue engine plant, which will get $150million to improve its technology and boost engine capacity.
``This investment will help continue the momentum that made 1996 our best year in history,'' Eaton said of Chrysler's new Detroit spending.
The company has the most aggressive second-quarter production schedule among U.S. automakers and plans to boost U.S. truck production 13 percent. That's up 5,900 vehicles from Chrysler's first estimate for the quarter.
The Detroit plan calls for Chrysler to spend $300 million at its Detroit axle plant to boost production as well and gear up to make parts for new models.
Chrysler's McGraw glass plant will receive $100 million for expansion and other improvements, while $10 million will go to the Conner Avenue assembly plant for introduction of its long-awaited Prowler convertible roadster and $3 million to a tool and die facility for improvements.
LENGTH: Medium: 53 linesby CNB