Chrysler Group LLC,
the U.S. automaker controlled by Fiat SpA, will add about 500 workers at a
Mexican engine plant, two people with direct knowledge of the matter said.
Chief Executive
Officer Sergio Marchionne will provide details later this week when he visits
the Saltillo area, where Chrysler has four plants, with Mexican President
Enrique Pena Nieto, said the people, who asked not to be identified speaking
ahead of the announcement.
The investment will
total $164 million to expand production at the engine factory in the town of
Ramos Arizpe, one of them said. Shawn Morgan, a Chrysler spokeswoman, declined
to comment.
Chrysler began
building the ProMaster, a Ram version of the Fiat Ducato light-commercial
vehicle, at a nearby facility in July. Marchionne said last week the van
assembled in Mexico uses some parts from Fiat’s Ducato facility in Italy.
Sharing components,
technology and production capacity among brands is a crucial aspect of
Marchionne’s plan to combine the two carmakers. Future models will cut costs by
sharing parts that comprise as much as two-thirds of a vehicle’s value.
Automakers are
expanding production in Mexico to capitalize on lower labor costs that bolster
the profitability of vehicles sold in the U.S. market.
Volkswagen AG’s Audi
brand is investing $1.3 billion in a new plant in San Jose Chiapa with a
capacity of 150,000 cars a year. General Motors Co. has budgeted $691 million to
expand three existing Mexican factories. Fiat also builds the North American
version of the 500 subcompact at a plant in
Toluca.
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