Chrysler is this week beginning a multimillion dollar renovation of its Jefferson North assembly plant as it prepares to launch a redesigned Jeep Grand Cherokee and possibly another Jeep vehicle at the 13-year old Detroit factory, according to The Detroit News.

The paper said the improvements at Jefferson North are part of a sweeping effort by Chrysler to make its assembly plants more flexible and match Japanese rivals on productivity and efficiency – massive retooling efforts at its factories in Brampton, Ontario; Newark, New Jersey and now Detroit are accompanying new model launches and slowly bringing the company up to speed with its swiftest competitors.

Michael Robinet, vice president of global forecast services at CSM Worldwide, told the Detroit News the plant upgrades suggest that Chrysler, after years of lagging behind the industry, is starting to understand the value of assembly lines that can produce several different models.

“We aren’t sitting in the dark days any longer,” Robinet reportedly said, “where there’s one vehicle going down one line and there’s no ability to build anything else.”

The paper said most of the 2,700 workers at Jefferson North were given layoff notices last week and will be off the job for three weeks from Monday while Chrysler replaces old equipment and revamps the plant’s paint and body shops – while idled, workers will collect 95% of their pay.

Employees will return in phases after the shutdown, with everyone back on the job by late July, when production of the 2005 Jeep Grand Cherokee begins, the Detroit News added.

Pilot production of the redesigned SUV reportedly will begin in June, with the first showroom-ready versions rolling off the line in July.

Byron Green, Chrysler’s vice president for assembly for truck and activity vehicles, told the Detroit News it was a remarkable turnaround given the extent of the renovations at Jefferson North.

“A three-week shutdown is a success in itself,” he told the paper. “Typically, we’d take eight to 10 weeks to totally gut a centre of operation and then rebuild, which took a lot of time. But competition doesn’t allow us to do that anymore.”

The revamped plant will be much different than the one the workers left, Green reportedly said.

“At the end (of the changeover), we’ll be able to run multiple models while simultaneously piloting another vehicle on the same line,” he told the Detroit News, adding: “We’ve never had that capability here before.”

According to the report, since it opened in 1991, Jefferson North has only been able to produce the Grand Cherokee but the one-factory-one-vehicle philosophy is outdated in today’s cost-conscious, competitive motor industry.

The Detroit News said that Green declined to say how much Chrysler is spending to modernise Jefferson North and noted that Chrysler spent over $1 billion to upgrade a big sedan factory in Brampton this year and $180 million to improve the Dodge Durango SUV plant in Newark, New Jersey.

Jefferson North’s annual production capacity will remain unchanged at 350,000 units, the report added.

CSM’s Robinet told the Detroit News that most manufacturers, led by the Japanese, are designing assembly lines to build a minimum of two vehicles.

Though Chrysler won’t comment on future product plans for Jefferson North, a union representative told the paper a second Jeep model is on the way.

“We got a totally new vehicle that will be hitting the market next year,” he reportedly said.

Analysts have told the Detroit News that Chrysler is working on a luxury SUV for the Jeep brand that would be built on the same underpinnings as the Jeep Grand Cherokee, making it a likely fit for Jefferson North. The seven-seat SUV, possibly named Wagoneer or Commander, is expected in dealerships in autumn 2005.

The last old Grand Cherokee came off the line on Friday afternoon, the paper noted.