/ 4 October 2005

Joint venture plant begins producing engines

DaimlerChrysler, Hyundai and Mitsubishi have begun production at a new plant that will supply more fuel efficient engines for nearly two dozen models worldwide.

The plant is part of the Global Engine Manufacturing Alliance, a joint venture between the three companies. The plant and a sister plant in Dundee, which will be completed in 13 months, will each have the capacity to build 420 000 engines annually, DaimlerChrysler said. The two plants are among a group of five Gema plants that will eventually produce 1,8-million engines annually.

Two other plants are already producting engines in South Korea and Japan.

The Dundee plants will employ 530 people, according to DaimlerChrysler, which is based in Germany and in Michigan.

The four-cylinder Gema engines — in 1,8, 2- and 2,4-litre configurations — are designed to deliver five percent better fuel efficiency than those they are replacing, said Gema president Bruce Coventry.

South Korea’s Hyundai had the lead design responsibility for the base engine, but Chrysler and Japan’s Mitsubishi made significant contributions to the design. So far, the engines are only being built for vehicles from those three companies.

DaimlerChrysler estimates the partnership will save the company $100-million each year. The company has been making four-cylinder engines for Chrysler at plants in Michigan and Mexico. Now, the Michigan plant will focus on six-cylinder engines and the Mexican plant will focus on Hemi engines, Chrysler spokesperson David Elshoff said.

The companies agreed to collaborate on the engines in September 2001. Although they didn’t release a total amount that has been invested in the project, the partnership has spent $803-million on the plant in Dundee, including $600-million for the facilities and $203-million for product development, Elshoff said.

”Gema represents a whole new business model for engine development, one that leverages the combined capabilities of its partners and economies of scale in order to generate breakthrough improvement,” Chrysler president and CEO Tom LaSorda said.

The plant has unique work rules. Workers are required to have at least five years’ experience, specialised training or a community college degree, said Mark Dunning, the facility’s senior human relations manager.

Groups of six to eight employees will work together in teams, Dunning said. The employees also will work four 10-hour shifts per week.

”As market pressures change, organisations need to adapt and be flexible enough to meet new demands,” said Nate Gooden, vice-president of the United Auto Workers’ DaimlerChrysler division.

LaSorda said Gema will produce conventional gasoline engines.

The power plants could be adapted for hybrid technology, but Chrysler anticipates using larger engines in its hybrid vehicles, he said. DaimlerChrysler, General Motors and BMW are jointly developing hybrid engines. – Sapa-AP