Chrysler Group has a reached a deal with the shell company that holds its former assets whereby the former is to buy a Michigan assembly plant for $20 million. The purchase will keep the plant under Chrysler control, and reverse a controversial decision that would have closed the plant, much to the chagrin of the UAW. The purchase also means the saving of 1,200 jobs.
The company has announced its plan to produce upgraded versions of the Sebring and Avenger at the plant through 2012, as part of the plan by Chrysler to revitalize their mid-size sedan lineup, which is seen as key for a return to profitability. According to a filing with the U.S. Bankruptcy Court, Old Carco LLC and Chrysler have been negotiating the deal since the unveiling of Chrysler”s five-year business plan back in November.
The Sterling Heights City Council also approved tax incentives to ease the retention of the plant by Chrysler. The sale is still subject to court approval however, and a hearing has been requested on March 11 to consider the matter.
– By: Stephen Calogera
Source: Automotive News (Subscription Required)