Wednesday, August 4, 2004

Adjacent Jeep supplier in Toledo a U.S. first

By John Seewer
The Associated Press

TOLEDO - Auto parts suppliers will build and operate a new plant and work side by side with DaimlerChrysler AG to make Jeeps - a first for the U.S. auto industry, the company said Tuesday.

The supplier plant will be built in three separate buildings adjacent to DaimlerChrysler's 3-year-old assembly plant that makes the Jeep Wrangler and Liberty.

The new $900 million plant will employ about 800 workers, mostly Jeep workers who are now laid off. It also will bring the production of two more vehicles to the assembly plant.

Officials from the automaker and the United Auto Workers praised the deal, saying it keeps jobs from going overseas while also allowing the company to invest more money in new product design.

"What we're doing in Toledo is not outsourcing," said Tom LaSorda, Chrysler Group's chief operating officer. "It's what we call insourcing."

Supplier investment will save the automaker $300 million, which is enough to pay for one new vehicle at the plant, LaSorda said.

The company said the new plant and existing plant will keep 3,800 workers in Toledo.

"We expect to stay here a long, long time," LaSorda said. "We're not going to abandon the people here in Toledo."

Construction will start in September, and production is expected to begin in 2006.

Three suppliers will own and operate the new plant: the Kuka Group, a German-based company will operate the body shop; Durr Industries, a Plymouth, Mich.-based company will run the paint shop, and Hyundai Mobis, a Korean company will produce the chassis assembly.

While the concept of a supplier-run plant sharing the same site with an assembly factory has been used overseas, it's new to the United States, the company and union said.

The factory will have vehicle body, paint and chassis shops. It will replace work that was done at a much older and outdated DaimlerChrysler plant in the city.

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