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Chrysler to invest in Kenosha engine plant

Chrysler Group will retrofit its Kenosha engine plant with an investment that will preserve hundreds of auto-industry manufacturing jobs and extend the life of the facility for years.

Chrysler Group will retrofit its Kenosha engine plant with an investment that will preserve hundreds of auto-industry manufacturing jobs and extend the life of the facility for years.

The Auburn Hills, Mich.-based automaker said it will announce details of its plans today. Gov. Jim Doyle will be joined by city, county and United Auto Workers leaders at the event.

Monday, the company confirmed that it is moving forward with plans to invest in Kenosha. Chrysler said it plans to retool the factory for a new family of V-6 engines that will replace all V-6 engines being made today by Chrysler.

The investment means that Kenosha's 820-employee work force will be part of the "powertrain offensive" that the company says is a key component of Chrysler's restructuring plan.

The new engine family, dubbed Phoenix, is considered essential to Chrysler's desire to make engines that have less noise and vibration and are more fuel-efficient, in response to growing consumer demand for vehicles that get better gas mileage.

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Based on financial information already released by Chrysler, the size of the investment is expected to be several hundred million dollars.

Of $3 billion that the company has earmarked for its powertrain investment, $2.35 billion has been allocated to new engine plants in Trenton, Mich., and Saltillo, Mexico, as well as an axle plant in Michigan.

That leaves as much as $650 million to invest in Kenosha as well as its share of the cost of a joint-venture transmission factory that is planned by Chrysler in Kokomo, Ind. The company's joint venture partner in that plant is the Germany-based Getrag Corporate Group, which already makes transmissions for Chrysler's PT Cruiser and other vehicles.

In Kenosha, employee unions voted last year to accept work-rule changes in a bid to help lure the new plant. Their jobs were at stake because the two types of engines that the Kenosha plant makes today will be phased out over the next several years and replaced by the Phoenix engines.

When the sale of DaimlerChrysler to Cerberus Capital Management, a private equity firm, was announced last month, Chrysler executives said they were committed to moving forward with their powertrain initiative.

Chrysler was originally considering opening a new Kenosha County plant in the Town of Somers, but backed off that plan earlier this year. Since then, the company has been studying whether to retrofit the 1.9 million-square-foot factory.

-- Copyright © 2007, Milwaukee Journal Sentinel/Distributed by McClatchy-Tribune Information Services

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