Chrysler to keep Michigan plant open, add jobs

DETROIT (Reuters) - Chrysler Group LLC will add a second shift to the Sterling Heights Assembly Plant near Detroit in early 2011 and keep that plant open beyond 2012, when it had been planned to shut, the company said on Friday.

Chrysler Chief Executive Sergio Marchionne will make the announcement about the Sterling Heights, Michigan, plant when he speaks to auto workers at a plant in Detroit where President Barack Obama will appear Friday.

Chrysler, which is under management control of Italy's Fiat, expects its European and South American sales to double between 2010 and 2011 to nearly 200,000 vehicles, the company said.

Chrysler estimated that about 500 supplier jobs will be added to support the additional production at the Sterling Heights plant.

Obama and Marchionne on Friday are to address workers at Chrysler's Jefferson North plant in Detroit, where the newly introduced Jeep Grand Cherokee is assembled. The launch of the Cherokee is the first significant new vehicle from Chrysler since Fiat took management control and partial ownership after last year's bankruptcy.

In remarks Marchionne is to give on Friday, he will thank Obama.

"It was because of the courageousness of his decision that Chrysler has been able to survive, and in fact thrive, a little more than a year after bankruptcy," Marchionne will say, according to prepared remarks released beforehand.

The Jefferson North plant also added a second shift of production and almost 1,100 jobs to build the Cherokee, which was launched in May.

Chrysler in the past two months has also invested $179 million at an engine plant in Dundee, Michigan, and more than $343 million at a transmission plant in Kokomo, Indiana.

(Reporting by Bernie Woodall; Editing by Lisa Von Ahn and Steve Orlofsky)