Chrysler to loan $7.4B to Michigan auto industry
Chrysler plans to pay $7 billion to the state of Michigan to build new cars, trucks and SUVs in the state.
The Michigan Department of Economic Development (MEDD) is expected to announce the loans Wednesday, a news release from the state said.
The loans will pay for approximately 1,500 jobs and more than $9 billion in investments to expand manufacturing capacity in Michigan, which is the nation’s sixth-largest auto state, the release said.
Chrysler has been in Michigan since 1999.
“I know the industry and Chrysler have made tremendous progress over the last decade, and we are thrilled that they will be bringing jobs and jobs to the Motor City,” Michigan Governor Rick Snyder said in a statement.
“We look forward to seeing the new cars and trucks that they are making in the coming years.”
Michigan is one of six states in the U.S. that have approved the loans.
The rest are in Michigan and New York, and are expected to be approved in the next week or so.
Snyder said the loans will help Detroit build up its vehicle assembly capacity and bring new cars to the market.
Michigan’s auto industry has struggled for years.
The state’s unemployment rate in August stood at 5.8%, its lowest level since May 2007.
The economy shrank by 1.5% in August, the first decline in more than a year.
Saginaw-based Chrysler said in its announcement that it would use the money to invest in the local economy.
The announcement comes as the company continues to struggle to get new vehicles to customers.
The company is now selling cars at a loss, the latest sign that sales are slowing.
Chrysler’s latest vehicle, the 2015 Dodge Challenger, was delayed by more than 10 months after being delayed by a major accident in December 2015 that killed a driver and critically injured three others.
Chrysler said it was looking to buy back parts and components, which could cost it tens of millions of dollars in costs.