UPDATE: Chrysler, Mitsubishi, Hyundai Have Ended Manufacturing Alliance
September 10 2009 - 2:02PM
Dow Jones News
Chrysler Group LLC said Mitsubishi Motors Corp. (MMTOY) and
Hyundai Motor Co. (HYMLY) have both dropped out of an
engine-manufacturing alliance, severing one of the auto maker's few
remaining partnerships.
Mitsubishi and Hyundai sold their interests in the Global Engine
Manufacturing Alliance plant back to Chrysler effective Aug. 31.
The GEMA plant will continue to build engines for Chrysler's
product lines. Financial details weren't disclosed.
Chrysler, which merged most of its assets with Italian auto
maker Fiat SpA (FIATY) in June, has cut almost all former
manufacturing partnerships Chrysler executives had brokered to keep
the company competitive.
Last month, Chrysler and Nissan Motor Co. (NSANY) ended their
vehicle-development partnerships, citing "significant changes in
business conditions." The move killed Chrysler's plans to sell a
new small car - developed by Nissan - in North America and Europe
by 2010.
All three auto makers were planning to use the GEMA plant,
located in Dundee, Mich., to quickly develop more advanced and
fuel-efficient engines for use in their vehicles. Production at the
plant started in October 2005 although the plant never reached full
capacity.
Chrysler spokesman Max Gates said the plant will continue to
provide four-cylinder engines to the auto maker.
The decision not to close the plant opens the possibility that
Fiat could use the extra space to develop engines in North
America.
Fiat, as part of its acquisition of Chrysler, promised to share
and develop new technologies with the auto maker for future product
development. Fiat also wants to bring some of its product to the
U.S.
Fiat has yet to provide details on its future plans for
Chrysler.
-By Jeff Bennett, Dow Jones Newswires;
jeff.bennett@dowjones.com; 248-204-5542