Chrysler Group will invest US$179m to launch production of a 1.4-litre Fiat engine for the North American market 500 at the company's Global Engine Manufacturing Alliance (GEMA) plant in Michigan, it announced on Thursday afternoon.

The investment will create up to 573 new jobs industry-wide, including up to 155 new Chrysler jobs.

The GEMA plant, located in Dundee, Michigan, will produce the 1.4-litre, 16-valve Fully Integrated Robotised Engine (FIRE) for use in Chrysler Group's growing fleet of fuel-efficient vehicles. FIRE is a collaboration between Chrysler Group and Fiat powertrain groups and will include Fiat's innovative advanced technologies to reduce engine emissions and improve fuel economy.

"This is one more important step forward that demonstrates our intent to deliver on the promise of the Fiat-Chrysler strategic alliance and the substance of the road map we laid out in November," said Sergio Marchionne, Chrysler Group CEO.

Today's announcement follows a thorough site selection review by the company and actions by the Michigan Economic Development Corporation and the Village of Dundee in support of the project.

Production of the Fiat engine will begin in the fourth quarter of 2010. Its first application will be in the North American-built Fiat 500 that will go into production in 2011.

Chrysler Group has two plants at the GEMA complex, located at 5,800 North Ann Arbor Road outside Dundee. In addition to the South plant which will produce the FIRE, the North Plant, opened in October 2005, produces the World Gas Engine, Chrysler Powertrain's naturally-aspirated, four-cylinder engine family.