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Chrysler will invest about $1.2 billion in its Brampton assembly complex and shift European production of the popular 300 sedan to the plant during the next few years.

The auto giant was to tell employees tomorrow that it plans to end production of the Chrysler 300 at the Magna Steyr operation in Graz, Austria, when an existing contract expires in 2010 and transfer production here, sources confirmed yesterday.

The company, which already builds the 300 model and three other vehicles in Brampton, had planned to invest about $700 million for another car there but will instead boost spending to $1.2 billion to accommodate changes at the plant, according to sources familiar with the company's plants.

Retooling and other alterations will allow the plant to build Chrysler 300 models with right- and left-side steering plus a diesel version for export to the European market, the sources said.

Chrysler will also move up introduction of a new-generation 300 model by a year, from 2011 to the summer of 2010.

The investment and shift in production will help maintain output and employment levels at the plant.

Last year, production of the Chrysler 300 sedan, Dodge Magnum wagon, Charger and Challenger sports cars increased slightly to almost 315,000 vehicles. The plant employs more than 4,000 administrative and production workers.

"This will make Brampton the company's worldwide lead plant for the 300 model for a long time," said one source.

Sources said Frank Ewasyshyn, executive vice-president of manufacturing for the Chrysler Group, is scheduled to meet with workers tomorrow for a "town hall" meeting on the shop floor to discuss the Brampton plant's progress and reveal the company's intentions.

A company spokesperson would not comment on the plant's event.

Vince Bailey, president of Canadian Auto Workers Local 1285, is on vacation and other union leaders could not be reached for comment.

The company had considered assembling a fifth vehicle, the Imperial luxury sedan, at the plant by 2009 but said yesterday it had cancelled that project a few weeks ago.

The loss of production of the Chrysler 300 is another blow to the plant in Austria, which is a division of Aurora-based auto-parts powerhouse Magna International Inc.

BMW informed Magna in May that it would transfer output of the next generation X3 sport-utility vehicle from the Graz operation to its plant in Spartanburg, S.C., in 2010. Magna is talking with other automakers to fill the void in Graz.

A Magna spokesperson would not comment on Chrysler's decision.

The Austrian plant produces about 30,000 Chrysler 300 vehicles annually in addition to several models for other automakers.

The major investment in Brampton follows a decision by workers earlier this year to accept a significant concession in their contract that would reduce operating costs if the company made an investment.

After initially rejecting changes that included elimination of premium pay of about $5,000 annually, the workers accepted the same concession a few weeks later in a so-called "shelf agreement."

The changes would take effect 30 days after the company announced a major investment at the plant. Output of the four vehicles at the plant has slipped from 177,422 in the first half of 2006 to 140,442 in the same period this year.

Production of the Chrysler 300, which was a big hit when it originally appeared in showrooms in 2004, has dropped from 89,148 in the first six months of 2006 to 65,220 in the same period this year.

There is also some speculation that Chrysler will eventually move the Magnum wagon to another plant in the U.S. and add a higher- volume vehicle in Brampton.

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