Chrysler wants to share space

Amy Scott Jun 16, 2008
HTML EMBED:
COPY

Chrysler wants to share space

Amy Scott Jun 16, 2008
HTML EMBED:
COPY

TEXT OF STORY

Scott Jagow: Hybrid cars are selling so well, Toyota can’t keep up with the demand. Today, Toyota said it needs to make more hybrid batteries, but doesn’t have the production space to do it. And the company says it can’t add new assembly lines until next year. So, I wouldn’t expect the Prius to drop in price anytime soon.

U.S. automakers have the opposite problem. They’re closing assembly lines and shutting down plants. But Chrysler has an idea: It plans to lease some of its space to a Canadian company.
Amy Scott reports.


Amy Scott: If the deal goes through, Chrysler says it will lease part of its Kokomo, Indiana transmission plant to Canadian parts maker Linamar.

Chrysler workers will provide the labor. They’ll start out making parts for Chrysler’s new fuel-efficient engines and transmissions. But they could also do work for other Linamar customers.

John Casesa runs a firm that advises and invests in the auto industry. As U.S. truck sales continue to slide, he expects to see more creative strategies like this one. He says you might even see GM and Ford get together to share plants.

John Casesa: These individual companies don’t have enough volume in their plants to support those facilities and those jobs anymore, so it makes more sense to work together rather than to have two separate plants running at low capacity.

The Chrysler-Linimar deal is expected to close sometime this summer. A Chrysler spokeswoman says the company is exploring a similar partnership at one of its Canadian plants.

I’m Amy Scott for Marketplace.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.