Chrysler’s Belvidere plant nearing completion

More than a year after accepting a $62.1 million state tax incentive package, Chrysler’s plant expansion in Belvidere is nearing completion.

The project, which adds a massive body shop with new machinery, tooling and material handling equipment along with additional workers, could be finished in “the next couple of months,” said Jodie Tinson, a spokeswoman for Auburn Hills, Mich.-based Chrysler Group LLC., which emerged from bankruptcy in 2009 and is partly owned by Fiat SpA of Italy.

The plant, which has about 2,500 workers, produces Dodge Caliber, Jeep Compass and the Jeep Patriot, and is positioning itself for more.

“We’re building the body shop for the future and will build other vehicles, not electric, but another sedan, at that plant,” said Tinson. She declined to elaborate.

In October 2010, Chrysler announced it would invest about $600 million to produce 2012 models. That investment focused on the 638,000-square-foot body shop, while the state of Illinois provided a $62.1 million incentive package that included tax credits and training for workers.

The company has yet to apply for a tax credit and has up to two years to do so, said Marcelyn Love, a spokeswoman for the Illinois Department of Commerce and Economic Opportunity.

The expansion opens the door to a new era of growth in the auto industry in northern Illinois, after a rough recession that rolled over small local suppliers, experts said.

“Many of our automotive suppliers have seen an uptick in orders over the past year,” said Mary Rose Hennessy, executive director of Business Innovation Services at the University of Illinois at Naperville.

“More significantly, Chrysler Belvidere is currently looking for a number of skilled workers to add to their capacity,” Hennessy said. The openings are in maintenance, various engineering positions, sales, logistics and other areas, she said.

“Each new job in manufacturing creates a multiplier effect ratio of 3.2 new jobs throughout the supply chain, so it appears that they are moving in a positive direction for Illinois,” Hennessy said.

When a large expansion occurs, such as in Belvidere, it means more than just job creation. The Belvidere plant is one of the few nationwide earmarked for money to be used on advanced technology vehicles and components, said George Anthony Augustaitis, a senior automotive and transportation analyst for Chicago-based Mintel International.

“The new expansion will allow the facility to build vehicles on Fiat architecture,” said Augustaitis.

With the expansion and additional money, new workers are coming into the facility and the local area. That means more dollars for local hotels, restaurants and businesses.

“Many of the new workers with full-time employment will have a bit more discretionary income than before and may come to Chicago to spend some of that extra money,” said Augustaitis.

The expanded workforce “can have a small, but positive effect on the local economy,” he said.

With Chrysler’s recent success in sales, component manufactures also will feel bidding on a vehicle program is less risky and local components suppliers to the current Belvidere plant may bid on projects with Chrysler’s future looking bright, said Augustaitis.

The completion of the much-needed expansion in Belvidere comes at a time when the auto industry is seeing a resurgence in sales of vehicles to consumers. November sales reported were at the highest they’ve been in two years. That’s good news for the auto industry as well as for vendors and suppliers that provide components and services.

The plant was originally constructed in 1964-65 and the first car was produced in July 1965, according to Chrysler. A number of well-known models soon rolled off the lines, including Chrysler New Yorker, Dodge Dynasty, Chrysler Imperial and others.

In 1994, the plant was converted and produced the Plymouth and Dodge Neon, which ended in 2005.

Any time a major company, like Chrysler, makes a significant expansion, the trickle-down effect could be significant.

“Across the board, it’s good news,” said Jim Nelson, spokesman for the Illinois Manufacturers’ Association.