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Chrysler to invest $600M in Ill. plant for Fiat-based models

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Chrysler to invest $600M in Ill. plant for Fiat-based models

Bradford Wernle

Automotive News -- October 28, 2010 - 10:37 am ET

Chrysler Group is investing $600 million in its Belvidere, Ill., assembly plant, where it is expected to build a new generation of Fiat-based vehicles.

The investment includes construction of a new 638,000-square-foot body shop and the installation of new machinery, tooling and material handling equipment, Chrysler said today.

Work on the expansion began this summer and will be completed in 2011.

Chrysler spokeswoman Jodi Tinson said today the company was not prepared to comment further on the future models.

The new models are expected to include a new Dodge compact sedan to be introduced in 2012, according to people familiar with the plans.

The Belvidere plant currently builds the Dodge Caliber, and Jeep Compass and Patriot crossovers.

The new Dodge sedan, which will replace the Caliber, will be the first of a series of vehicles based on a Fiat-derived architecture called Compact Wide, according to people familiar with the plans.

A Chrysler compact sedan is also planned in 2013, according to Chrysler's five-year product plan, unveiled last November.

Speaking to reporters in Turin, Italy, last month, Chrysler CEO Sergio Marchionne said there will be a 40 mpg version of the new Dodge compact sedan.

Manufacturing a Chrysler Group model in the United States that delivers 40 mpg is the second of three milestones Fiat must reach to increase its stake in Chrysler to 35 percent in three increments.

The Italian automaker currently controls 20 percent of Chrysler.

Chrysler will reach the first of those three milestones when it begins production of Fiat's 1.4-liter FIRE MultiAir engine in Dundee, Mich., between the end of this year and the first quarter of 2011, Marchionne said.

That engine will first be used in the Fiat 500 minicar, which will go on sale in January. That car, also expected to exceed 40 mpg, will be made in Toluca, Mexico.

Details of the third milestone are still being worked out with the U.S. government, but it is designed to boost Chrysler exports, particularly in South America, by relying on Fiat's dealership network.

Chrysler said it has now invested $2.1 billion in new facilities since a new company was formed under Fiat management following the automaker's emergence from bankruptcy in June 2009.

The Belvidere assembly plant currently employs 2,349 workers on two shifts.

It opened in 1965 and initially produced a variety of Dodge and Plymouth two-and four-door models. The factory was later converted to production of front-wheel-drive vehicles - including the Plymouth Horizon and Dodge Omni. The plant began building Dodge Calibers in December 2005. Output of the Jeep Compass and Patriot followed in May and December 2006, respectively.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20101028/OEM/101029847/1251#ixzz13fjPIA00

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Chrysler bringing new compact to Illinois plant

Alisa Priddle / The Detroit News

Chrysler Group LLC today confirmed a $600 million investment in its Belvidere, Ill., plant in preparation for a new compact car due in late 2011.

Work has already begun on a 638,000-square-foot body shop, which will be complete next year. The investment also includes new machinery, tooling and material handling equipment.

Belvidere employs about 2,300 workers making the Dodge Caliber hatchback and Jeep Compass and Patriot crossovers.

The partnership with Fiat SpA is providing the engineering for a new family of compact and midsize cars for Chrysler, including the replacement for the Caliber and eventually a single Jeep to replace the two currently in the lineup.

In Italy, Fiat has already introduced the Alfa Romeo Giulietta as the first vehicle to use the C-Evo platform, referring to the underpinnings that will be shared by many compact and midsize models for both automakers.

The new compact Dodge will be the first for the Auburn Hills automaker, and its launch has been moved up from 2012 to late 2011. Plans call for a sedan, harkening back to the Neon that was the predecessor to the Caliber hatchback which entered the market in 2005.

The new Dodge sedan is designed to get 40 miles per gallon; one of three targets Fiat must meet to increase its stake in Chrysler from the current 20 percent to 35 percent.

Another condition is a fuel-efficient Fiat engine for Chrysler vehicles — the automaker is investing $179 million and adding 150 jobs at its Dundee, Mich., Engine plant to add a 1.4-liter engine.

The third condition is international distribution of Chrysler vehicles using Fiat's network.

On Friday, Sergio Marchionne, who is CEO of both automakers, said the three conditions will be met next year when the new compact Dodge comes out.

The Belvidere investment augments Chrysler's plans to invest $850 million at its Sterling Heights Assembly Plant to make the next-generation of the Dodge Avenger and Chrysler Sebring (renamed 200 for the 2011 model year), both of which will also come from the C-Evo family.

The two sedans have received major modifications for the 2011 model year to keep them fresh until the all-new Fiat-engineered replacements launch in 2013.

Chrysler has invested $2.1 billion in its U.S. operations since its emergence from bankruptcy in June 2009.

The workforce also continues to recover with a second shift of 1,100 at the Jefferson Jeep plant in Detroit and the possibility of adding a third shift if demand remains strong for the new Grand Cherokee.

A second shift of 900 workers will be added in Sterling Heights in February.

Belvidere also could require another shift.

"We want to thank Illinois Governor Pat Quinn, Illinois Senator Dick Durbin, Illinois Congressman Don Manzullo and Belvidere Mayor Frederic Brereton for working with us to make this investment possible," said Scott Garberding, Chrysler head of manufacturing, in a statement that also acknowledged the support of the United Auto Workers.

"With their help, the Belvidere Assembly Plant will be expanded and retooled in order to build the next generation of vehicles that will meet the needs of our customers," Garberding said, noting the plant has adopted Fiat's World Class Manufacturing system and is "transforming itself to become one of the safest and most efficient assembly plants."

"This is an important announcement," said General Holiefield, vice president of the UAW's Chrysler Department.

He applauded the company for "maintaining good manufacturing jobs in Illinois."

From The Detroit News: http://detnews.com/article/20101028/AUTO01/10280456/1148/auto01/Chrysler-bringing-new-compact-to-Illinois-plant#ixzz13g9aRxLu

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