By Brian E. Clark
WisBusiness.com
A patchwork of state and local agencies will provide $13 million in loans and grants to aid Chrysler in a $450 million upgrade of its Kenosha engine plant. Gov. Jim Doyle made the announcement today at the 1.9 million square-foot factory, where he was flanked by Chrysler, Kenosha County, City of Kenosha and state Commerce Department officials.
In addition, American Transmission Co. and WE Energies will provide Chrysler a $3.8 million “diminishing loan” to build a new high voltage transmission system to the factory that will be paid back in the future as part of Chrysler’s electric bills.
Mark Williamson, ATC’s vice president for major projects, said nearly all of the utility funding will come from ATC and that work on the project would begin soon. If Chrysler closes the plant before five years, it will have to pay ATC back on a sliding scale that declines 20 percent per year.
“This project is somewhat unusual, but we did it before with a Johnsonville plant,” Williamson said. “Chrysler wanted it, it’s good for the economy, it’s our job to provide this service and their power consumption is going to go up dramatically with the changes at the plant.” Williamson said the loan will not require the approval of the Public Service Commission, which regulates utilities in the state.
In announcing the loans and grants, Doyle said state needs to invest in a “strong, growing, vibrant and innovative manufacturing sector” that leads both the nation and the world. Last year, he flew to Detroit to meet with Thomas LaSorda, DaimlerChrysler CEO, to urge him to make a major new investment in the Kenosha plant.
“Chrysler’s $450 million commitment demonstrates our ability to continue attracting important investments and high paying jobs for our workforce,” Doyle said. “I am pleased that the state could be a good partner with Chrysler as they retool their Kenosha plant to meet the needs of a growing economy.”
Richard Chow-Wah, a power group vice president, said the investment represents a “long-term commitment to new vehicle components that support consumer demand for refined, economical-to-operate vehicles for many years to come.” With the retooling, the factory will be able to produce what he called a “new family” of fuel efficient V-6 engines.
Chrysler officials said the Kenosha investment is part of an $3 billion effort to develop new Phoenix engines — in addition to a dual-clutch transmission joint venture with German parts maker Getrag and new common axle family.
The Kenosha plant should begin production of the Phoenix engines by January 2011 and will be able to 400,000 units when it reaches full volume.
The $16.8 million incentive package includes:
• $7 million loan from the Department of Commerce to aid in the capital investment and upgrading the facility’s power infrastructure
• $3 million in training assistance grants including $1 million from Gateway Technical College, Department of Commerce and the Department of Workforce Development
• $2 million loan from the City of Kenosha to aid in the capital investment and upgrading the facility’s power infrastructure
• $1 million loan from Kenosha County to aid in the capital investment and upgrading the facility’s power infrastructure
• $3.8 million in assistance from ATC & WE Energies to upgrade the electrical service to the facility
