Chrysler To Detroit: We’ve Got Good News And Bad News… (UPDATE)

Company restructuring plan likely to close one plant, open another and cut almost10,000 jobs, according to local paper.

Chrysler Group will announce a restructuring plan on February 14 that is likely to include the closure of one of the two Mack Engine manufacturing plants on Detroit’s east side. An assembly plant is also expected to close in Newark, Del., resulting in a total job loss of 10,000 blue-collar positions, according to a local paper.

The Detroit News cited unnamed sources familiar with the restructuring plan, named "Project X."

Chrysler is also expected to announce plans for a modern engine plant in southeast Michigan for Chrysler and Mercedes vehicles, the paper added.

The Mack Engine manufacturing operation consists of two complexes, Mack I, which makes 4.7-liter V-8 engines, and Mack II, which makes 3.7-liter V-6 engines. The two facilities employ over 1,200 employees, according to the paper.

The article said that the Mack I facility has already cut 250 people, due to lower truck sales. That leads many analysts to believe that the Mack I facility will be the one to close as part of the restructuring.

The new manufacturing plant is estimated to cost $700 million and will be similar to Chrysler’s joint-venture engine plant with Mitsubishi and Hyundai in Dundee, Mich., the paper added.

Also involved in the restructuring is a sharing of vehicle architectures and parts for new Chrysler and Mercedes models. The two will work together on the next generation of cars and share underbody parts, like the basic chassis and suspension systems, the article said. 

Executives at Chrysler have yet to comment on any details of  "Project X."

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