Chrysler Plans to Spend $1.8 Billion to Hike Production

Chrysler Corp. said Thursday that it might expand production by more than a third and add as many as 6,000 jobs as it tries to meet demand for its hot-selling Jeep Grand Cherokee, Dodge Ram pickup and other vehicles.

If the auto maker gets the agreements it wants from labor, governments and suppliers, it would spend $1.8 billion to increase production to 3.5 million vehicles annually worldwide by 1996. That’s the year the current United Auto Workers union contract comes up for renegotiation.

The company had earlier planned to spend $1 billion to expand production but decided to increase the amount by $800,000.

“We have to strike while the iron is hot, and nowhere is the demand hotter than in Jeep and Dodge Ram pickup truck sales,” Chairman Robert Eaton said. “If we don’t move ahead now, we might miss opportunities for improved sales in North America, including exports to Mexico under NAFTA. At the same time, we could lose the jobs that new sales could bring.”

Without elaboration, the company said parts of the plan require cooperation from the UAW, local and state governments and suppliers.

Eaton said the plan could add 6,000 jobs, but he detailed only 3,900 new hires.

Under the plan, the St. Louis North Assembly Plant in Fenton, Mo., which was scheduled to close next January, would be reopened in the third quarter of 1995 to build the Dodge Ram. About 1,500 employees would be added, including 900 new hires.

A third shift would be added to the Jefferson North Assembly plant in Detroit later this year, adding 600 jobs.

Chrysler said it would spend $20 million to increase production of the Dodge and Plymouth Neons at its Belvedere assembly plant in Illinois.

As previously approved by the Chrysler board in September--and making up $1 billion of the $1.8 billion program--production is being increased at several plants, including St. Louis and Windsor, Ontario.

The company is increasing capacity at plants in Newark, Del.; Graz, Austria; Kenosha, Wis.; Trenton, Mich., and the Mound Road plant in Detroit.