MrSpace

Dow Jones Business News
DaimlerChrysler, Hyundai, Mitsubishi To Form Engine JV
Tuesday February 11, 1:57 pm ET
By Sharon Silke Carty, Of DOW JONES NEWSWIRES


DETROIT (Dow Jones)--DaimlerChrysler AG , Hyundai Motor Co. and Mitsubishi Motors Corp. are set to announce a new four-cylinder engine factory in Michigan later Tuesday.
The joint venture, which will be called Global Engine Alliance, will create 400 jobs in Dundee, Mich., said Kathy Blake, vice president of business development services for the Michigan Economic Development Corp. In return for building the 450,000-square-foot facility, the three companies will receive tax credits on the first 200 people employed there for the next 20 years. Global Engine Alliance will also receive a seven-year business-activity tax credit.

Blake couldn't immediately say how much the tax credits would be worth to the joint venture.

The companies formed the venture last May, and DaimlerChrysler's Chrysler unit will run the North American plant. Chief Executive Dieter Zetsche said in January the plant will make about 600,000 engines a year.

The plant could cost as much as $1 billion. Still, Zetsche has said alliances have helped the company lower development costs to $6 billion in 2002 from an average annual cost of $8 billion.

Production at the plant is slated to begin in 2005, according to a recent press release. Construction at the 245-acre site is still subject to government approvals.

The three companies will pool their resources in a method called "Cross- Functional Team Participation," where each partner is responsible for a specific area of plant development and implementation, including plant layout, production processes and work-force strategy.

The engines produced under the Global Engine Alliance will come from three different plants, including the Dundee, Mich., site. Hyundai will begin producing the engine in 2004 at a plant in Korea. Mitsubishi will also begin production in 2004 at a plant in Japan. The U.S. facility should come on line in 2005.

Total worldwide production of the fuel-efficient engines is estimated at more than 1.5 million units.

"We are moving aggressively ahead with our plans to build a facility and begin production of a new family of fuel- and emissions-efficient power plants," CEO Zetsche said. "These engines will power future generations of Chrysler Group vehicles, and may also supply the needs of our Alliance partners."

-By Sharon Silke Carty, Dow Jones Newswires; 313-226-1249; sharon.carty@dowjones.com

livelyjay

iTrader: (20)

It's always a good thing to hear about jobs coming to the US instead of flowing out to places like Mexico. It's especially nice to hear of them going to Michigan, which sorely needs more jobs. The thing I question, is why only 400 jobs, shouldn't there be more?

BrianDaBox

What's misleading about Diamler-Chrysler is that it looks like they are adding a lot fo jobs but really not. In oregon, the freightliner truck manufacturing plant and parts manufacturing plant have had nearly half the work force cut in the last year and a half. Frieghtliner being a subsidiary of Diamler-Chrysler. Close to 1500 jobs were lost in that time. But, with the extra 400 on the east coast it looks like theyt are redeeming that. BTW, the Corporation is riddled with adventures in other fields. They own tomas built buses, sterling trucking, western star trucking, unimog, freightliner, america la franc (fire trucks), ofcourse chrylser and mercedes, to name a few. They are a large corporation so realistically, 400 jobs isnt that many.

MrSpace

do you work in the truck industry?

I'm currently at Paccar plant.. building Peterbilt and Kenworth trucks

Etienne

BrianDaBox

My whole family does. Grandpa, uncle, cousins. My dad used to work corporate but felt he wasn't getting paid what he thought he should and left. He now works at the ATC Freightliner in dallas fortworth.

YouNVthis

Nice to hear more jobs are coming. Theres a Daimler Chrysler Mercedes factory coming to Georgia, they say it will generate like 1,000 jobs or so. BUT, in result of generating more jobs, that means more kids, which means more schools. So they will be building like 4 more schools. Oh well, the Daimler Chrysler company donates to alot of causes, so it's all good.

nhblk03ser

I read somewhere that the next Lancer and Neon will share chassis and motors. DaimlerChrysler and BMW designed and build a motor in Brazil. Its the Mini Cooper motor and in the same article I read said that the Neon and Lancer will be getting a modified version of this motor.

uranium9v

iTrader: (3)

The article is leading me to believe Chrysler is the only one that is set on employing the new motor, however the others in the alliance may later employ the engine. Hopefully if it sucks, Mitsu will stay away from it.

KidIce

More jobs is Great!!! I just hope that they can pull it off and build quality engines and not sacrafice quality like the crankwalk prone DSM joint 95-99 4G63 Eclipse/Talon Engines. Also why just 4 cylinder engines? in my opinion Mitsubushi already has a great 4cylinder engine (Evo 4G63) and the deal can only benefit Hyndai and Diam Chrysler. Mitsu needs to develop stronger, more potient, and bulletproof 6cylinder engines for future cars.


-Ice