Freightliner LLC will renovate the dingy, 65-year-old Detroit Diesel Corp. factory in Redford, MI, for $275 million.

The investment plans call for the 3.2 million-sq.-ft. (297,289-sq.-m) facility, which currently employs 2,800 people, to become home to a new heavy-duty truck engine line, medium-duty engine assembly and expanded axle assembly by 2007.

The headquarters of Freightliner's Sterling Truck Corp. and Western Star Trucks Inc. also will move this year — along with at least 50 jobs — from Ohio to the Redford campus.

Freightliner, Detroit Diesel, Sterling and Western Star are owned by DaimlerChrysler AG.

By 2007, the Redford facility will begin building an all-new heavy-duty truck engine equipped with the latest diesel and emissions technology.

The program's price tag is pegged at $1 billion, and the engine eventually will be exported to numerous global markets. In North America, the new engine will be installed in heavy-duty Freightliner vehicles.

The Redford facility also will house within two years assembly operations for the MBE 900 medium-duty truck diesel engine, which has been imported from Germany since 1999 and powers Freightliner vehicles in a wide variety of commercial uses.

Construction already has begun at the Redford plant to accommodate the 85,000 sq.-ft. (7,896 sq.-m) expanded axle operations of Axle Alliance Co. (AAC), a DC subsidiary.

The new Sterling and Western Star headquarters will open next spring.