Chrysler will try to improve its slow-selling midsize cars and keep making them indefinitely at a Sterling Heights, MI assembly plant until it can design a replacement based on Fiat technology, according to Associated Press.
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A person briefed on the company's business plan said Monday the Sterling Heights plant makes the Dodge Avenger and Chrysler Sebring and was scheduled to close by the end of next year. However, its life will be extended for an undetermined period until a new product can be developed based on Fiat technology, said the person, who asked not to be identified because the business plan has not been approved by the Chrysler board.
Fiat CEO Sergio Marchionne, who was given control of Chrysler after it exited bankruptcy protection in June, presented the business plan to the new board on Friday, but no action was taken, the person said.
The board is reviewing the plan and could act on it as soon as this week, according to the person.
Chrysler is to brief the Obama administration's auto task force sometime this week, according to a Treasury Department spokeswoman.
The company has received about $15.5 billion in U.S. government aid.
Chrysler intends to "refresh and renew" the Sebring and Avenger and is looking at improvements to the interior and how to make the engine and transmission quieter, the person said. That means the plant will stay open to make the Sebring and Avenger beyond its scheduled closing.
Last week, another person briefed on the plan said Chrysler intends to build a new midsize car based on Fiat's C-EVO frame and suspension with a Fiat-based engine and transmission. The frame, being designed for a European compact car, can be stretched to serve as a U.S. midsize car, the person said.
The person also said Chrysler is trying to get the car on the U.S. market in 18 months, which is around the middle of 2011.
Most of Chrysler's assets were sold in bankruptcy court to a new company run by Fiat.
The Sterling Heights plant now employs about 1,300 workers and is running one shift per day, according to Gates.
Through August, Chrysler's sales were down 39 percent compared with the same period last year, the largest decline of any major automaker. In the critical midsize segment, which often is top-seller in the U.S. market, the company this year has sold only 34,700 Sebring and Avenger sedans combined. That's only 15 percent of the 238,000 Camrys sold by Toyota, the perennial sales leader.
Chrysler is banking on Fiat's smart designs and fuel efficiency to win over U.S. buyers.
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