Chrysler Outlines New Toledo Plant, Suppliers

TRAVERSE CITY, MI – After months of planning, Chrysler Group executives unveil the final structure for the auto maker’s all-new Toledo, OH, Jeep plant, which will begin production in 2006.

The plant features a unique partnership with suppliers that puts them in charge of running the paint and body shops and developing rolling-chassis systems.

The plant will replace the Jeep Parkway and Stickney Avenue facilities, which are among the oldest auto plants in operation. Those facilities currently build the bodies and conduct final assembly for the Jeep Wrangler.

Total investment is expected to reach $2.1 billion, including site development. About $900 million of that is dedicated to the supplier co-location project. Chrysler expects the supplier involvement in the plant to equal $300 million in savings over traditional manufacturing-plant development costs.

Chrysler Group COO Tom LaSorda

The new facility will have the ability to produce up to four different models and will be built on land adjacent to the Toledo North plant, which currently builds the Jeep Liberty.

“We will begin construction on the site in the fall, and launch production will begin sometime in 2006,” Tom LaSorda, Chrysler Group chief operating officer, says in a conference call with reporters to announce the project.

Supplier partners include Kuka Group, which will construct a new 250,000-sq.-ft. (23,225-sq.-m) body shop on the site and directly employ 200 workers.

Durr Industries will build a 400,000-sq.-ft. (37,160-sq.-m) paint shop at the plant with 160 direct employees. Hyundai Mobis will construct a 200,000-sq.-ft. (18,580-sq.-m) chassis building, where a rolling-chassis module will be manufactured.

The painted vehicle body and chassis module will be sent on conveyor lines directly into the final assembly building, where all other vehicle components will be added.

“This pushes the envelope of specialization. Suppliers will get the opportunity to expand their traditional role,” says Peter Rosenfeld, executive vice president-procurement for Chrysler Group. “I don’t think I’d characterize this as a gamble. We call it a noble experiment, and we think working together with these folks makes a heck of a lot of sense.”

Chrysler says there still are a few areas that need to be filled by suppliers. The auto maker will make sourcing decisions on these within the next 60-90 days.

Visteon Corp. has been selected as the interior supplier for the plant. The company says it has yet to decide whether it will build a facility in the Toledo area to support the plant. The contract includes instrument panel, center console and door panels.

Requirements for suppliers within the plant include representation by the United Auto Workers union.

Rosenfeld says regardless of who is running which operation, Chrysler will remain responsible for overall vehicle quality and will work with some of its suppliers to determine which Tier 2 and Tier 3 suppliers will be providing subsystems to the plant’s direct-supply base.

Says Rosenfeld: “There are some components that Chrysler will be directing, there will be components that suppliers will direct and there are some that we will select together.”

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