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DaimlerChrysler AG is launching an effort to remake its assembly plant in Toledo, Ohio, for the 21st century.

Tom LaSorda, the Chrysler Group’s chief operating officer says the new $2.1 billion manufacturing project in Toledo will utilize outside suppliers to handle key elements of the assembly process. Three suppliers will build and manage key manufacturing process facilities for body, paint and chassis operations that are totally within the plant “footprint” of the new plant that Chrysler plans to have in operation by 2006.

The companies chosen for this supplier co-location project, pending final negotiation of purchase agreements, are The Kuka Group of Sterling Heights, Michigan, which is responsible for the body shop; Durr Industries, a German company that will operate the paint shop; and Hyundai Mobis, which will operate the chassis-assembly unit. The Kuka Group will construct and operate a new 250,000-square-foot plant on the Toledo site that will weld and assemble vehicle bodies. Durr Industries, which operates from Plymouth and is a leader in the design, manufacture, and installation of paint systems for automobile manufacturers, will take responsibility for the construction and operation of a new 400,000-square-foot building, which will paint the Kuka-built vehicle body. South Korean-based Hyundai Mobis is a world-class automotive modules supplier, specializing in the design, development, manufacturing and assembling of chassis modules. Mobis, which operates a sales and engineering unit in Farmington Hills, Michigan, will construct a new 200,000-square-foot chassis building, where a rolling chassis module will be manufactured.

The final assembly process for the new vehicle will be handled by Chrysler, according to Mary Beth Halprin, a Chrysler spokeswoman. The new body, paint and chassis buildings will be erected close to the Chrysler Group’s Toledo North plant, which opened in 2000, and will allow DaimlerChrysler to shut an old plant in the center of Toledo that has been used to build vehicles for more than a century.

One of the keys to the project was the cooperation of the United Auto Workers. Members of UAW Local 12 in Toledo had voted in December to modify the local’s contract with the Chrysler Group to permit suppliers to handle part of the assembly work, DaimlerChrysler executives said. Lloyd Mahaffey, UAW regional director for the state of Ohio, said the project will keep roughly 3800 jobs in Toledo. “It enables us to implement new ways to become competitive in a rapidly changing time for our industry,” he said.

Frank Ewasyshyn, Chrysler Group executive vice president — manufacturing, said, “This is a true collaborative partnership with the UAW, as well. We had to look long and hard at what kind of innovative work practices would allow an investment like this to happen in an operation like Toledo — the oldest existing manufacturing facility in America.”

“Automakers and suppliers are under pressure to compete on a global level. By joining together to create an innovative co-located manufacturing project of this kind in North America, we all will benefit from the opportunity to learn and strengthen our partnership,” added Lasorda.

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