Chrysler is expected to announce plans this week to build a new $700 million axle plant northeast of Metro Detroit in Marysville to replace its aging axle plant in Detroit.
The new plant would employ 900 workers and begin production for the 2010 model year.
Members of United Auto Workers Local 961, which represents workers at Chrysler's Detroit Axle plant, are scheduled to vote today on an agreement covering work rules for the new plant, according to information distributed to workers and obtained by The Detroit News.
The Michigan Economic Growth Authority is expected to meet this morning in Lansing to approve tax incentives for the new plant, according to people familiar with the situation.
Once those hurdles are cleared, the plant will be formally announced Wednesday by Chrysler CEO Tom LaSorda, Gov. Jennifer Granholm and UAW President Ron Gettelfinger.
The Marysville facility will produce 2.1 million axles a year for DaimlerChrysler's Chrysler Group, the Mercedes Car Group and DaimlerChrysler's heavy truck division, according to the information distributed to workers. It will be located at Busha Highway and Davis Road in Marysville, south of Port Huron.
The timing of the announcement of a plant to build axles for Chrysler and Mercedes comes as a surprise, considering DaimlerChrysler is meeting with potential buyers for Chrysler. Chrysler spokesman Mike Aberlich said the project needs to move forward despite the uncertainty.
“It's very much what we need to do in order to change our mix to more fuel-efficient vehicles,” he said. “It's very much a key part of our plan. It's been endorsed by (DaimlerChrysler CEO) Dieter (Zetsche) and the (supervisory) board. We can't stop and wait for any potentiality here.”
Chrysler's plans will result in a net loss of jobs for Michigan as the Detroit Axle plant on Lynch Road is phased out over the next few years.
Detroit Axle employs about 1,646 workers, according to Chrysler's Web site. It is already slated to lose 250 jobs this year through buyouts and early retirement offers as part of Chrysler's restructuring plan announced Feb. 14.
Detroit Axle workers will be offered early retirement packages or transfers to the new facility, which will eventually employ 900.
Auburn Hills-based Chrysler lost $1.5 billion in 2006 and is slashing 9,000 U.S hourly jobs, mainly through voluntary buyouts and early retirements as part of its three-year turnaround plan. Chrysler's restructuring includes a $3 billion investment in new engines, axles and transmissions that would improve fuel efficiency. The new axle plant is part of that investment.
Provided that UAW Local 961 members approve the new agreement, the new plant will employ an efficient team-based manufacturing approach with fewer job classifications. Workers will receive training and must learn how to do multiple jobs.
Chrysler will build a new union hall for Local 961 to service the plant.
The plant will build three families of axles “incorporating state-of-the-art designs to improve fuel efficiency, noise vibration harshness, durability, and significant parts commonality within and across axle families to reduce cost,” according to the information distributed to workers.
While Michigan landed the new plant, Detroit is losing one of the few remaining auto plants within the city's limits.
Detroit Axle, built in 1917 and purchased by Chrysler in 1928, has been expanded seven times, most recently in 2001.
The 1.8 million-square-foot factory builds rear axles, front drive axles and trailing axles for a slew of Chrysler, Dodge and Jeep vehicles, including the Dodge Ram, Jeep Grand Cherokee and Dodge and Chrysler minivans.
“It's a pretty old facility,” said Laurie Harbour-Felax of the Harbour-Felax Group in Royal Oak. “It certainly wasn't a world-class plant by any means.”
She compared the new plant to the Global Engine Manufacturing Alliance plant in Dundee, a joint venture among Chrysler, Hyundai and Mitsubishi.
“Chrysler is proving at GEMA engine that they can do that very cost-effective,” she said. “If they feel like they can create the same kind of model, why not?”
Detroit Axle day shift workers were informed of the new plant and today's vote early Monday by union officials including UAW Vice President General Holiefield and Local 961 President Edward May, according to four Detroit Axle workers who attended the meeting. Holiefield, the UAW's chief Chrysler negotiator, once worked at Detroit Axle.
The four workers fear if they don't approve the labor agreement for the new plant, Detroit Axle could still close, and they would face layoffs.
“I'll probably vote yes,” said Nina Talison, a machinist who's a 15-year veteran at Chrysler. “It's a tough situation because we are going to lose some workers, and the new plant will be pretty far to drive to, but I know the other option is that all our jobs get lost.”
Assembly line worker Karim Michael said he had mixed feelings about Monday's announcement but likely will vote yes.
The vote will be from 6:30 a.m. to 8 p.m. today at Local 961, which is near Detroit Axle.
“This isn't like days past when we were really strong,” said Michael, a 29-year veteran of Chrysler. “Nowadays, it's about trying to save as many jobs as you can. It helped a lot that Holiefield presented the information to us because he's well liked here at the plant, and we know he cares about it. But, still it's a bittersweet moment because of the jobs lost.”
