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Last Car Plant Brings Detroit Hope and Cash



07/15/2013

DETROIT — There is a section of Detroit’s east side that sums up the city’s decline, a grim landscape of boarded-up stores, abandoned homes and empty lots that stretch all the way to the river.

And in the middle of it stands one of the most modern and successful auto plants in the world.

More than 4,600 workers staff Chrysler’s sprawling Jefferson North factory nearly around the clock, making one of the most profitable vehicles on the market, the Jeep Grand Cherokee.

The plant, painted white and surrounded by a fence topped with barbed wire, generates about $2 billion in annual profits and is a huge contributor to the health of Chrysler, the nation’s third-largest automaker, and Fiat, its Italian parent company.


Since then, annual production has skyrocketed from fewer than 100,000 vehicles a year to more than 300,000. And a work force that had dwindled to 1,300 people has more than tripled. In June, Grand Cherokee sales rose 33 percent in the United States, as consumers paid as much as $50,000 for a fully loaded model.

The profits and productivity at Jefferson North would put it on par with the most efficient luxury car plants in Germany and the best factories operated by Japanese automakers in the southern United States.
The Chrysler plant is one of the biggest employers in Detroit, which has a 16 percent unemployment rate. It is also one of its largest taxpayers, last year paying more than $12 million in property taxes. A third of its workers, both union and management, live in the city, the company said.
The success of Jefferson North defies conventional wisdom in the auto industry that the most efficient plants are new factories built on big tracts of rural land in southern states like Tennessee and Alabama. In fact, the wide, sparsely used streets around Jefferson North make it easy for trucks laden with supplies or finished Jeeps to move in and out. “Our urban core is much less dense than in other cities,” Ms. Dziczek said. “And that’s a huge statement about Detroit.”

It’s hard to escape the stark contrast between the manicured lawns and jammed parking lots on the grounds of the plant and the desolate, pockmarked neighborhoods that surround it.

Streetlights are often dark at night on Jefferson Avenue because of a lack of money in the city’s budget. In May, the police discovered a human torso in a burned-out home three blocks from the plant’s front entrance.
Complete Article http://www.nytimes.com/2013/07/16/business/last-car-plant-brings-detroit-hope-and-cash.html?pagewanted=all&_r=0
 

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July 19, 2013

Chrysler Sticks With ‘Made in Detroit’ Despite City’s Bankruptcy




Earlier this year Chrysler executives and assembly workers celebrated production of the new Dodge Viper sports car at the Conner Avenue plant in Detroit.

Little is expected to change in the U.S. auto industry in the wake of Detroit’s bankruptcy filing. The city’s politics, finances and infrastructure have been in dire straits for decades, so people familiar with Motor City history will not be surprised by the filing.


Still, car makers are likely to maintain their connections with Detroit’s scrappy image. Chrysler, which has based its recent comeback in part on its overarching “Made in Detroit” marketing theme, said it has no plans to change its marketing approach or to distance itself from the troubled city.

“Chrysler Group believes in the City of Detroit and its people. We not only continue to invest in the city and its residents by adding to our presence in Detroit, we also are committed to playing a positive role in its revitalization,” the company said in a statement.

Arguably the auto industry saw this coming many years ago and moved much of their operations to neighboring cities and suburbs. Only General Motors still has its headquarters in downtown Detroit. GM said it also feels an attachment to Detroit and published the following statement:

GM has assessed the potential implications of Detroit’s bankruptcy and we do not anticipate any impact to our daily operations or business outlook. Our first thoughts, however, are with our neighbors throughout the city. GM is proud to call Detroit home and today’s bankruptcy declaration is a day that we and others hoped would not come. We believe, however, that today also can mark a clean start for the city. We hope that all parties recognize the sacrifices to follow can help rebuild a stronger Detroit with a level of services and quality of life its citizens deserve. A healthy auto industry will play a part in Detroit’s comeback story and GM is doing its part.

As car makers seek to attract buyers with the “Made in USA” label, they are likely to continue focusing on Detroit, even if much of its Motor City image is based on nostalgia dating to the first half of the last century.

Detroit’s population peaked at two million in 1950 but has fallen to about 700,000 today. The city’s unemployment rate has nearly tripled since 2000 and its crime rate has continued to rise in recent years even as other historically dangerous cities have become safer
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