DETROIT (AP) _ DaimlerChrysler AG's Chrysler Group plans to build two new plants in Michigan and upgrade three others.
The investments, to be formally announced late Wednesday morning, include a new $700 million axle plant in Marysville near Port Huron and a new $730 million plant in Trenton to build the next generation Chrysler V-6 engine, company spokesman Mike Aberlich said.
The company also plans to build a new $300 million paint shop at its Sterling Heights plant, where it makes the Chrysler Sebring and Dodge Avenger. The company will also announce a $50 million investment in its Warren stamping and assembly complex, which now makes the Dodge Ram and Dakota pickup trucks. A new version of the Ram is coming in 2008, the company has said.
The new axle plant will replace the Detroit Axle plant, which was built in 1917 and now employs more than 1,600.
Official announcement of the plants was to be made Wednesday by Chrysler, United Auto Workers President Ron Gettelfinger and Michigan Gov. Jennifer Granholm.
Members of UAW Local 961 at the Detroit Axle plant have been voting on new work rules that the company says are essential to building the plant, allowing employees to work in teams and do multiple jobs. The rules are similar to those approved by the union before Chrysler built a new four-cylinder engine plant.
The Detroit Axle plant makes front- and rear-drive axles for many Chrysler Group truck products as well as trailing axles for Dodge and Chrysler minivans. It also manufactures powertrain components for the Chrysler 300, Dodge Magnum and Dodge Charger cars.
Announcement of the new plants come as Chrysler's German parent talks with potential buyers for its U.S. operations.
Chrysler officials said they must modernize their facilities to become more competitive. The new axle plant, complete with robotics, will allow the company to do the same work with fewer employees.
``The business has a responsibility to keep running'' despite the sale talks, Chrysler Chief Executive Tom LaSorda said in an interview with The Associated Press on Tuesday.
The new investments will help Chrysler roll out products with great fuel efficiency and performance, he said, and are part of Chrysler's commitment to invest $5.8 billion to $6 billion per year in its operations, LaSorda said.
LaSorda also said he expects the flexible work rules to spread to all Chrysler plants.
``It's just a function of competing in the worldwide market,'' he said.