posted 01-26-2005 01:30 PM
Belvidere Chrysler hits $400 million jackpot BELVIDERE -- DaimlerChrysler Corp. will invest $419 million to upgrade the aging Belvidere assembly plant, adding up to 1,000 new jobs and a second production shift which will start in March 2006.
Company and union leaders, flanked by Gov. Rod Blagojevich, U.S. Rep. Don Manzullo and other state and local politicians, will make the announcement tomorrow morning at the Neon factory.
Halprin said when the work is completed the plant would increase production from one shift to two for the first time since 2000. The plant will shutdown between September and December while the refurbishing work is accomplished. Union workers will continue to receive some level of pay during the shutdown, though the exact amount is unknown.
After refurbishing, the factory will manufacture a replacement for the Dodge Neon, which will cease production in September 2005. Rebecca Lindland, a senior automotive analyst at Lexington, Mass.-based Global Insight, an economic and consulting firm, said three vehicles would likely come to Belvidere within two years, including:
A "tall Dodge wagon" similar to the Pontiac Vibe, a four- and five-door version "sportback." Lindland called this the "spiritual successor" to the Neon. Production will begin in January 2006, with units costing about $15,000 to $16,000.
A Jeep sport utility vehicle, named Patriot or Scout. "What we found from a variety of sources is that it is very square and about the size of the Forester," Lindland said.
Production will begin in February 2006. The price is unknown, but similar to the Jeep Wrangler or Liberty.
An entry-level Jeep sport utility vehicle, based on the Jeep Compass, a concept car first shown in 2001. Lindland said the Compass was "more along the lines of the (Subaru) Outback,"
and was more appealing to women. Production begins in July 2006 and will cost between $15,000 and $16,000.
Lindland estimated the production at the Belvidere plant would be about 140,000 vehicles in 2003, ramping up to 225,000 units in 2007.
Halprin characterized the $419 million as a "fairly large" investment, but said each plant varied in its needs, depending on the age of the plant and the amount of changeover required.
The Brampton, Ontario, assembly plant, which manufactures the Chrysler 300, the Dodge Magnum and the Dodge Charger, required a $1 billion investment. By contrast, the Warren Truck Assembly Plant, in Warren, Mich., maker of the Dodge Dakota, required only $100 million."
DaimlerChrysler has 14 assembly plants in the United States.
Jack Lavin, director of the Illinois Department of Commerce and Economic Opportunity, said the state would contribute $36 million in grants and tax credits for the project.
The state incentive package includes $20 million in Economic Development for Growing Economy tax credits (EDGE), $10 million in enterprise zone tax credits, $5 million in infrastructure improvement grants and a $1 million job training grant.
To receive the EDGE credits, DaimlerChrysler has committed to create 1,000 new jobs within two years and maintain those jobs over a 10-year period.
Halprin said the company was still assessing how the new jobs would be filled, but said that some workers who were previously laid off would have the opportunity to return. Also, some workers from other DaimlerChrysler plants might be eligible for relocation to Belvidere.
C.D. Graham, president of United Auto Workers Local 1268, which represents Belvidere workers, said between 300 and 500 employees were currently in a layoff status.
Halprin confirmed the new jobs would be union employees.
The majority of the DaimlerChrysler renovation will take place in the factory's body shop, with some improvements to the paint shop and final assembly area. Existing robotics, first delivered in the early 1990s, will be updated to take advantage of new technology