DETROIT (AP) -- Chrysler Group LLC gave a big boost to the battered Michigan economy Friday when it announced the addition of about 1,100 workers to help build the new Jeep Grand Cherokee.
The company made the announcement at the Detroit factory as it celebrated the start of Grand Cherokee production. Chrysler said it expects strong sales of the new sport utility vehicle, which is due in showrooms next month.
Almost all the workers will be new hires, which Chrysler can pay about $14 per hour, about half the hourly rate received by current workers represented by the United Auto Workers union. The workers will staff a second shift at the factory, called the Jefferson North Assembly Plant.
The announcement is good news for Michigan, which has the highest unemployment rate in the nation at 14 percent.
CEO Sergio Marchionne joined 1,400 current plant workers and a number of federal, state and local officials to celebrate the start of Grand Cherokee production. The new vehicle, which is more efficient and car-like than the current model, goes on sale in June.
"Obviously, we have a long way to go," but this is a good start, Marchionne told workers who gathered inside the plant.
Moments earlier, Marchionne, who also heads Italy's Fiat Group SpA, drove one of the new sport utility vehicles through the plant and to a stop in front of the stage. He and front-seat passenger Michigan Gov. Jennifer Granholm emerged from the shiny new SUV to applause and hollers from the workers.
"We're here to declare that Chrysler is back!" Granholm shouted.
Chrysler Group LLC began making the Grand Cherokees in recent weeks, and Friday's event served as the official launch.
On Thursday, Marchionne said Chrysler is considering a public stock offering sometime next year.
Marchionne said there is enough demand in the marketplace to support initial public offerings for Chrysler and General Motors Co., both of which were restructured in government-funded bankruptcy protection cases last year.
He also said Chrysler struggled through a painful restructuring last year, and he never wants to see the company lose money again, predicting that U.S. vehicle sales will top 11 million this year and 12 million in 2011.
Sales slumped to 10.4 million last year, the worst in more than a quarter century.
Chrysler would have been sold off in pieces in late 2008 or early 2009 if the U.S. government had not stepped in with billions in aid. The government put Marchionne in charge of turning around the Auburn Hills-based automaker and gave Fiat a 20 percent stake in the company.
But on Friday, Marchionne was all smiles, talking about the "milestone launch" of the Jeep Grand Cherokee, a totally new version of the venerable SUV.
The new model is more efficient than the old one, behaving more like a car than a truck on suburban highways. Yet it still has off-road capability, the company said.
AP Auto Writer Tom Krisher in Detroit contributed to this report.