Sterling Heights, Michigan, may be leased

[rickaren]

Chrysler Said to Consider Keeping Plant Open for Mid-Size Cars


Aug. 25 - Chrysler Group LLC, the U.S. automaker Fiat SpA controls, may delay closing the plant that makes its mid-size sedans for at least a year until the company creates new models, people familiar with the situation said.

The factory in Sterling Heights, Michigan, may be leased from Old Carco LLC, Chrysler’s predecessor now in bankruptcy, to keep making the Dodge Avenger and Chrysler Sebring after a production accord ends next year, said three people, who declined to be named because the matter isn’t final.

The potential delay reflects the difficulty the combined company faces in retooling existing factories and making new models. The plant is the only Chrysler site that manufactures - mid-size sedans, and the company hasn’t said whether it will shift production or phase out Avenger and Sebring.

“It was a tremendously ambitious timeline because they had no product plans for their replacement,” said John Wolkonowicz, an analyst at IHS Global Insight Inc. in Lexington, Massachusetts. “You can’t very well abdicate the biggest car segment in the market while you get a new car ready.”

The Auburn Hills, Michigan-based company, formed June 10 when Fiat bought most assets of Chrysler LLC in bankruptcy, is operating the plant with 1,322 Chrysler Group workers. A transition agreement with the bankrupt entity allows Chrysler to lease the factory through 2012, one person said.

Sales of the Avenger declined 56 percent this year through July and the Sebring sedan and convertible combined fell 74 percent, according to Autodata Corp. in Woodcliff Lake, New Jersey.

Plants Operating

Chrysler wouldn’t comment on whether it’s considering any extension.

“Under terms of the master transaction agreement, Sterling Heights Assembly Plant was assigned to Old Carco LLC and is scheduled to close in December 2010,” Chrysler said in today in a statement. “We have not announced any change to that plan.”

The company chose to leave the assembly plant, along with six other factories and an office building, in bankruptcy. Four of the plants, including Sterling Heights, are still operating and have scheduled closing dates through 2010.

Old Carco’s active factories are in Sterling Heights; Detroit; Twinsburg, Ohio; and Kenosha, Wisconsin.

Proceeds from a lease would become part of the estate, which is being liquidated to pay off unsecured creditors, one person said.

Article Link:Chrysler Said to Consider Keeping Plant Open for Mid-Size Cars - Bloomberg.com

[rickaren]

UAW official: Sterling Heights plant may stay open past 2010

Posted Wednesday, Aug 26, 2009, 11:37 am in Employee News

Chrysler Group LLC could delay the closing of its Sterling Heights, Mich., sedan plant to buy time for new models to be developed with Fiat SpA, a union official told The Detroit News.

The plant is one of eight Chrysler factories slated to be shut down under the agreement that created the Chrysler Group in an alliance with Italian automaker Fiat SpA after Chrysler filed for bankruptcy, the News said.

“I believe they haven’t made up their mind,” Bill Parker, president of United Auto Workers Local 1700, which represents workers at the Sterling Heights plant, set to close in December 2010, told the paper. About 1,300 people work at the plant.

Parker told the paper that extending the factory’s life for a year or more is one option on the table, as is closing it as scheduled. Chrysler declined to confirm the possibility of keeping Sterling Heights open longer, the story said. “We have not announced any changes to that plan,” a spokesperson told the paper. (The Detroit News)