Chrysler to retool plant for new SUV

TRAVERSE CITY, MICH. —  Chrysler Vice Chairman Tom LaSorda said Wednesday that his company would invest $1.8 billion to expand a Detroit assembly plant and retool it to make a new car-based sport utility vehicle.

LaSorda said the money would go for tooling and a flexible body shop at the Jefferson North Assembly Plant. That plant now makes the Jeep Grand Cherokee.

LaSorda said the investment would add 285,000 square feet to the plant and keep more than 400 jobs in Michigan.

The new vehicle will be more fuel-efficient than the truck-based Cherokee and will be equipped with the company’s new Phoenix line of fuel-efficient engines.

LaSorda said the factory should be retooled by the end of next year and would start cranking out the new vehicles early in 2010.

He said the investment would include energy-efficient lighting and the ability to use solid waste and paint sludge as energy sources.

Chrysler is the latest automaker to announce plans to retool factories to make more fuel-efficient vehicles as high gas prices squelch sales of trucks and SUVs.

Ford Motor Co. last month announced plans to retool two U.S. plants to make small vehicles instead of trucks and SUVs, in addition to previous plans to revamp a Mexican truck plant to make the Ford Fiesta subcompact.

Toyota Motor Corp. has suspended truck and SUV production at its U.S. plants and plans to start building the Prius hybrid in the U.S. in 2010.

General Motors Corp. has cut shifts at some plants and has been idling truck and SUV production at others for weeks at a time. At the same time, GM is adding shifts at plants that make the Chevrolet Malibu and Cobalt.

Four GM plants that make pickups and SUVs are set to close by 2010.