DaimlerChrysler has announced it will invest $US1.78bn in new and existing plants in Michigan.

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The investment is part of a so-called powertrain offensive. The plan calls for a new plant to be built in Trenton requiring an investment of $730m to build the new Phoenix V6 engine family.


A further $700bn will be invested in a new axle plant in Marysville, and a further $300m in the Sterling Heights assembly plant. The Warren Truck assembly plant also is scheduled to receive $50m investment.


However, there are doubts about whether the investment will be completed if Chrysler is sold. A Lehman Brothers analyst was quoted by the Detroit Free Press as saying that a potential buyer would probably cancel the investment.


According to the motor city paper, the investment would see a reduction of 1,500 employees at the axle and Trenton engine plants, although this would not necessarily mean redundancies as some people would be re-employed at other facilities or go into the automaker’s ‘job bank’.

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Chrysler announced a restructuring plan in February that included the elimination of 13,000 jobs and an investment of US$3bn in more fuel efficient engines, transmissions and axles. However the plan was overshadowed by comments from DaimlerChrysler CEO Dieter Zetsche suggesting Chrysler Group could be sold, the newspaper added.


Chrysler CEO Tom LaSorda said yesterday: “The future is all about vehicles and new product and new power trains. We can’t just sit back and wait a week or two weeks, or a month or six months, to see what’s going on. We have to forge ahead.”


The state of Michigan is offering more than $11m in tax incentives for the Trenton engine project, while the City of Trenton is offering more than $60m in tax abatements.