Chrysler... May Buy Back Sterling Heights Assembly Plant From Old Bankrupt Self to Save 1,200 Jobs
Chrysler is negotiating to buy the Sterling Heights Assembly Plant from its bankruptcy estate and save about 1,200 jobs that were expected to be eliminated at the end of 2010.
Sterling Heights City Council last month voted Jan. 19 to extend $7.4-million property in tax abatements to encourage Chrysler to keep the plant open as well as a nearby center where parts are organized before being taken to the production line.
The extension was contingent on Chrysler reaching a deal with the bankruptcy court and the administrators of Old CarCo, the parts of old Chrysler that were not part of the taxpayer-funded restructuring, by today.
At its meeting tonight, Sterling Heights City Council unanimously approved a request from Chrysler for a two-week extension to complete the acquisition. Chrysler has until Feb. 16 to produce a purchase agreement for the assembly plant. Mayor Pro Tem Joseph Romano said he’d even be willing to grant another extension if it was needed.
When council voted Jan. 19 to extend $7.4 million in the tax abatements, it asked Chrysler to commit by today’s council meeting to keep the plant open. Brian Glowiak of Chrysler’s external affairs staff thanked the council for extending the abatements last month, saying “your action on this matter, it played a very pivotal role.”
While audience members who spoke were split on the idea of the abatements and the extension, council members fully supported Chrysler.
"If Chrysler doesn’t stay in business, we have a lot more to give up than we are now," Councilwoman Barbara Ziarko said.
In Chrysler’s bankruptcy restructuring, its Sterling Heights Assembly Plant and six other factories were left out of the new company. But Chrysler is making substantial changes to the two midsize sedans -- Chrysler Sebring and Dodge Avenger -- and plans to produce the new models at Sterling Heights in November. Production would continue through 2012, Glowiak said.
Mayor Richard Notte said the city wants to be in competition for the new product line after 2012, saying the abatements and extension are "an investment in the future. We’ve got to salvage what we can. We want to see that plant live on beyond 2012."
Chrysler’s long-term product plan, as management detailed last November, calls for all-new midsize cars to be engineered from a Fiat underbody. But those models won’t be introduced until 2013, so keeping Sterling Heights open became a viable option, at least through 2012.
Midsize sedans are an important market segment in which Sebring and Avenger have struggled. Making their replacements more competitive is a priority in Chrysler’s five-year turnaround plan.
Greg Gardner - Christina Hall - February 2, 2010 - source Freep