JEEP Supplier plant to be next to assembly
Labor leaders hope to persuade workers at the supplier plant to join the union.
TOLEDO (AP) -- Auto parts suppliers will operate a new plant and work side-by-side with DaimlerChrysler AG workers to build Jeeps -- a first for the U.S. auto industry, the company said Tuesday.
The supplier plant will be built adjacent to DaimlerChrysler's 3-year-old assembly plant that makes the Jeep Wrangler and Liberty.
The new $900 million plant will employ about 800 workers, mostly Jeep workers who are now laid off. It also will bring the production of two more vehicles to the assembly plant.
Construction will start in September, and production is expected to begin in 2006.
Officials from the automaker and the United Auto Workers praised the deal, saying it keeps jobs from going overseas and allows the company to invest more money in new product design.
"What we're doing in Toledo is not outsourcing," said Tom LaSorda, Chrysler Group's chief operating officer. "It's what we call insourcing."
The company said the new plant and existing plant will keep 3,800 workers in Toledo. Construction will start in September, and production is expected to begin in 2006.
Supplier investment will save the automaker $300 million, LaSorda said.
New to this country
Though the concept of a supplier-run plant sharing the same site with an assembly factory has been used overseas, it's new to the United States, the company and union said.
The factory will have vehicle body, paint and chassis shops. It will replace work that was done at a much older and outdated DaimlerChrysler plant in the city.
Three suppliers will own and operate the new plant -- The Kuka Group, a German-based company, will operate the body shop; Durr Industries, a Plymouth, Mich.-based company, will run the paint shop; and Hyundai Mobis, a Korean company, will produce the chassis assembly.
Lloyd Mahaffey, director of the UAW region that covers Ohio, said the deal makes sense despite criticism from some union workers that suppliers will take over the work that they once did.
"We were going to have make some changes," Mahaffey said. "We had to give it a lot of thought."
Labor leaders hope to persuade workers at the supplier plant to join the union once it is in operation.
Bruce Baumhower, president of UAW Local 12, which represents the Jeep assembly plant workers, said he thinks the workers will come on board because many of the laid-off workers already are in the union.
"Some people think this is a risk," he said. "We think it's a big opportunity."