The Chrysler Group has announced plans for a new $US2.1 billion factory in Toledo within which three suppliers will build and manage body, paint and chassis operations.

The new facility, on the company’s existing manufacturing complex on the city’s north side, will begin producing vehicles in 2006.

The companies chosen for the so-called ‘supplier co-location project’ are the Kuka Group (body shop operations), Durr Industries (paint shop operations), and Hyundai Mobis (chassis assembly).

Chrysler Group chief operating officer Tom LaSorda described the concept as an alternative to the traditional ‘greenfield’ site approach to new manufacturing facilities employed by many automakers.”

At the Chrysler Group, we love to defy conventional wisdom,” said LaSorda.  “That’s why – today – 23 of our 24 major manufacturing facilities are still in urban locations … and are still part of the economic lifeblood of their communities.”

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Chrysler claims it can accomplish similar savings to ‘greenfield’ concepts because supplier investment in the project will equate to about a $300 million saving, “enough to pay for one additional derivative product,” according to LaSorda.

Total capital investment for the Toledo project is projected at $900 million.