Chrysler, GM Tout Production Gains Amid Obama Visit

U.S. President Barack Obama
U.S. President Barack Obama speaks at Chrysler Group LLC's Jefferson North Assembly Plant in Detroit. Photographer: Jeffrey Sauger/Bloomberg

Chrysler Group LLC and General Motors Co. announced plans to boost production and add jobs as U.S. President Barack Obama visited the Detroit area today to promote the government’s bailout of the auto industry.

Chrysler said its plant in Sterling Heights, Michigan, which had been scheduled to shut in 2012, will remain open and that a second shift will be added in 2011. GM said it plans to build 45,000 of the Chevrolet Volt electric car at its Hamtramck plant in Detroit in 2012, 50 percent more than previous targets.

Obama and the automakers are trying to show that the government’s $84 billion investment in the industry -- most of which went to GM and Chrysler -- is paying off as the companies show progress and bring back lost jobs.

The additional work at Chrysler’s Sterling Heights plant will create about 900 jobs and spur suppliers to add about 500 workers, the Auburn Hills, Michigan-based company said in a statement.

Chrysler Chief Executive Officer Sergio Marchionne said the automaker “probably” will add a third shift at its Jefferson North Assembly Plant in Detroit, which makes the Jeep Grand Cherokee and Dodge Durango sport utility vehicles. Production of the Durango will begin in the fourth quarter and the third shift will depend on how well the vehicle sells, Marchionne told reporters after Obama’s visit to the plant.

Jefferson Plant

The Jefferson plant employs 2,800 people, Jodi Tinson, a Chrysler spokeswoman, said in an e-mail. That’s up from 1,452 at the end of 2009. The plant assembled 49,600 vehicles last year, down from 72,900 in 2008.

Chrysler owes the U.S. Treasury $5.8 billion, according to the automaker’s first-quarter financial results. The U.S. government owns 9.9 percent of the automaker.

GM, which is 61 percent owned by the government, is preparing for an initial public offering that may sell 20 percent of the Treasury’s stake and reduce the U.S. to a minority owner, people familiar with the plan said in June.

The company said earlier this week that the Volt will sell for $41,000 and come with a monthly lease rate of $350 a month. The Volt can travel 340 miles on a tank of fuel, with the first 40 in electric drive before a gasoline engine starts to recharge the battery.