DC Proceeding With Mitsu Sharing
The co-designed mid-size and small cars include small Jeep.

DaimlerChrysler AG's preparations for the launch of a new fleet of automobiles built off a platform developed through its partnership with Mitsubishi are picking up momentum.

Tom LaSorda, Chrysler Group chief operating officer, has confirmed that the group now plans to build a replacement for its compact Neon at the company's assembly plant in Belvidere, Ill. "The C-segment decision has been pretty much made. It'll be built in Belvidere ," LaSorda said. Union sources, meanwhile, said the proposed build at Belvidere will include at three distinct vehicles including one that has been designed to carry the Jeep badge.

LaSorda, who succeeded Wolfgang Bernhard as COO last spring, also emphasized that Mitsubishi and Chrysler engineers had collaborated on the development of the new chassis. But the "top hats" or the sheetmetal and interiors for the new Chrysler Group vehicles was done exclusively by Chrysler designers, LaSorda said. "I don't think people understood that," he said.

LaSorda also said the company will make a final decision on where to build the D-segment or mid-size vehicle developed under the same joint program, within the next several weeks at another plant in the United States . In the wake of Chrysler's success in developing variations of the rear-wheel-drive platform carrying the Chrysler 300 and Dodge Magnum, Chrysler also is planning to build several variations of the new D-segment vehicles.

Both the C- and D- vehicles will come on line in 2006. Later in the decade, the same platform also will be used for the replacement for replacement for the PT Cruiser and for another more SUV-like crossover vehicle, according to sources familiar with the plan.

LaSorda said Chrysler is still moving ahead with plans for building a compact pickup for Mitsubishi at the truck plant in Warren, Mich. DaimlerChrysler scaled back its support for the struggling Japanese automaker last spring but the two companies have continued to collaborate on some joint projects.

The Chrysler Group also is preparing to increase its sales volume both in the U.S. and abroad. Consequently, the company has no plans to phase out any of its assembly plants, LaSorda said. "We did our restructuring and we're in good shape to keep them all open," he said.

LaSorda also said the Chrysler Group is working with suppliers to contain costs. "What we want them to do is optimize their businesses," added LaSorda, who noted Chrysler has little choice but to continue pressing for price reductions from suppliers. Consumers are unwilling to pay more for vehicles and competition is intense. "I think we can do it collectively rather than it being a one-way street," added LaSorda.

Chrysler, for example, has tried to help suppliers hit by rising steel prices. "We know it's a burden but we've been fairly successful in addressing the issues on an ad hoc basis," he said. "We buy a lot of steel for our suppliers. Our leverage is greater," he said.

Of late, the Chrysler Group had to go looking for ways to offset the rising value of the Canadian dollar, which is making it more expensive to run the company's assembly plants in Windsor and in Brampton, Ont. outside of Toronto . "You've got to get more out of operating and more out of material," added LaSorda, who noted the swing in the exchange rate has been easier for Chrysler to manage because of the success of the LX cars, the Chrysler 300 and Dodge Magnum.