Illinois Site Selected for Auto Plant : Chrysler, Mitsubishi to Build $500-Million Diamond Star Factory

United Press International

Chrysler Corp. and its Japanese partner, Mitsubishi Motors Corp., will build a $500-million car plant on a 636-acre site west of Bloomington-Normal, Ill., Chrysler Chairman Lee A. Iacocca announced today.

The plant, to start production in the second half of 1988, will assemble 180,000 small cars a year and employ 2,500 workers, Iacocca said at a news conference after signing the agreement with Mitsubishi President Toyoo Tate at Chrysler’s world headquarters.

The majority of the work force will be hired and trained in the Bloomington-Normal area beginning in the summer of 1987. The plant will create an additional 9,000 supplier jobs, Iacocca said.


State Commits $40 Million

At a news conference at the plant site, Illinois Gov. James R. Thompson hailed the decision and said the state had committed $40 million over the next five years to help in the recruiting, training and education of the plant’s workers. He said the new company, to be called Diamond Star Motors Corp., will be given tax advantages of at least $160 million during the next 10 years.

Iacocca and Tate said the Bloomington-Normal site was selected after an extensive search by a Chrysler-Mitsubishi manufacturing engineering team through various sites in Illinois, Indiana, Michigan and Ohio.

Iacocca said the final decision on the plant site was made “within the last week. . . . It was very close. All four states were very aggressive.”

50-50 Ownership

Chrysler and Mitsubishi each will invest about $250 million to construct and equip the plant, he said. Each will hold a 50% equity in the joint venture.

Both firms will be represented on the board of directors and will participate in all policy decisions, Iacocca said.

The first product off the line will be a 1989 two-door sport speciality model, he said, followed by a four-door sedan to be introduced in the late 1990 model year. Both models will be developed primarily by Mitsubishi and will have Mitsubishi engines.


Chrysler will be largely responsible for the styling of the cars, Iacocca said.

Diamond Star will have an authorized capital of $150 million, Mitsubishi said in an announcement in Tokyo.

Dealers to Share Product

Products will be sold through dealers of both Chrysler and Mitsubishi on a 50-50 basis, the company said.

Mitsubishi, which is 24% owned by Chrysler and is the fourth-largest Japanese auto maker, will be the fifth Japanese firm to produce cars in the United States.

Toyota Motor Corp., Japan’s largest auto maker, has launched a joint car making venture with General Motors Corp. at the Fremont, Calif., facility.

Its top rival, Nissan, began to produce cars in Tennessee earlier this year, in addition to its trucks. Mazda Motor Corp., Japan’s No. 3 car maker, will operate its own car plant in Michigan by the spring of 1987.

Honda Motor Co. was the first Japanese firm to build cars in the United States.