Chrysler to invest $198 million at Detroit plant, create 250 jobs

Posted on July 24, 2012

Chrysler told employees Monday at its Mack Avenue complex that it is planning to invest $198 million at the site on Detroit’s east side to build its Pentastar V6 engine.

The investment would create 250 jobs. Last week, Chrysler said it would end production at the Mack Avenue II engine plant in September. About 200 people work there. They will eligible to transfer to other plants or apply for jobs at neighboring Mack Avenue I.

“Chrysler Group will be working with the City of Detroit and the State of Michigan regarding potential economic development incentives to assist us in making the business case for the investment,” the company said in a statement.

“This action … will continue to reaffirm our commitment to the revitalization of the city of Detroit.”

With the requested financial incentives, production could begin by the end of 2013.

Bob Warfield, Detroit’s director of communications, said Chrysler has filed a tax abatement application with the city.

“The mayor is excited about the possibility — the jobs that Chrysler’s investment would create,” Warfield said.

Mack Avenue Engine I, located at 4000 St. Jean Ave. in Detroit, was purchased by Chrysler in 1953. Chrysler makes a 4.7-liter V8 engine for the Ram 1500 at Mack Avenue I.

News of the new investment comes two weeks after Chrysler informed the state of Michigan that it will idle its adjacent Mack Avenue Engine II plant on Sept. 9, affecting about 200 workers there.

On Monday, Chrysler told employees at Mack Avenue II they can take their seniority rights with them as they transfer to other plants in the region, according to two people briefed on the plans who were not authorized to speak publicly.

Under Chrysler’s contract with the UAW, employees lose seniority rights if a plant is idled. Seniority rights are important to workers because those with more time at the company can pick the shift they wish to work.

The employees who work at Mack Avenue II can choose to be considered for the new positions at Mack Avenue I or apply for openings at other Chrysler plants in the area, the people said. Employees also can elect to be put on a list to return to Mack Avenue II if Chrysler ever decides to build another product there.

The Free Press has previously reported that Chrysler may assemble a Maserati SUV at Mack Avenue II.

Chrysler makes a 3.7-liter V6 engine at Mack Avenue II for the Jeep Liberty and Ram 1500. That engine is being discontinued and replaced by its 3.6-liter Pentastar V6.

The Pentastar engine offers more power and better fuel efficiency than previous V6 engines. It already is offered in 11 Chrysler, Dodge and Jeep models.

Chrysler also plans to offer the Pentastar V6 engine, which is also made in Trenton and Saltillo, Mexico, and an eight-speed transmission on its 2013 Ram pickup, which goes into production in September.

By: Brent Snavely, The Detroit Free Press