DaimlerChrysler AG hopes to break ground on the $600 million expansion of its Mercedes-Benz M-Class sport/utility vehicle assembly plant in Vance, AL, as early as November.
That doesn't give officials much time to decide whether the additional 1.5 million sq.-ft. announced Aug. 28 should be an expansion of the 1.2 million-sq.-ft. structure or an adjacent stand-alone facility. It could be a combination of the two, says Plant Manager Bill Taylor.
The investment, augmented by $119 million in state incentives, will pay for the equivalent of second body and paint shops and doubling of final assembly, adding 2,000 jobs to the 1,900-person workforce.
When construction is complete (end of 2003), Vance will be capable of producing 160,000 SUVs.
The second-generation '05 M-Class is expected to be more car-like in its ride and could share some components with a future Jeep Grand Cherokee. The platform could spawn a sibling, perhaps a larger version with a third row of seats. However, DC officials have said Vance's lineup won't include a minivan or pickup, nor is a minivan/SUV in the cards (see Ward's Automotive Reports — May 29, '00, p.1).
Mr. Taylor says there are advantages to having everything under one roof, but he also recognizes the clean slate possibilities of a new structure. Existing facilities will be utilized, but the new complex will bear little resemblance to the original $300 million facility that has undergone $80 million in expansions in three years to boost capacity to 80,000.
The new facility will be more flexible than the current body shop dedicated to a single product, but it might not be as flexible asplants capable of launching multiple products with little downtime, says Mr. Taylor. Future product detail will determine plant configuration, such as one assembly line or two, as well as downtime and launch targets.
Mr. Taylor says the shortage of engines, especially diesel, will be solved in time for the capacity increase. He would not say if the solution lies in an expansion at the Unterturkheim engine facility in Germany, further utilization of Detroit Diesel Corp. or a combination of these resources.
The diesel variants had been assembled exclusively in Graz, Austria, until Vance added them to its mix this summer. The contract with the Graz facility always was intended to be a temporary supplement to meet growing demand in Europe. The contract is for 75,000 units, is almost half complete and ends early in 2003. While the intention is to not renew it, “never say never,” says Mr. Taylor.