Kiwi-s.com - Teamwork in Tuscaloosa Alabama factory at the center of Daimler, Chrysler cooperation

VANCE, Ala. -- Mercedes-Benz and Chrysler will still cooperate plenty after Daimler-Benz and Chrysler part ways, DaimlerChrysler Chairman Dieter Zetsche says.

And the Mercedes-Benz U.S. International Inc. plant here will be the focal point of that relationship. The plant celebrated its 10th year of operations last week.

Mercedes and Chrysler reiterated plans to cooperate on future projects after DaimlerChrysler's sale of 80.1 percent of Chrysler to Cerberus Capital Management LP. Sharing will revolve around such items as electrical architectures, SUV chassis parts, active safety systems, Bluetec diesel technology and fuel cells.

As part of the initiative, Chrysler has said it will supply Mercedes' Alabama plant with axles when Chrysler opens a $700 million axle plant in Marysville, Mich., in 2010. It remains unclear whether Mercedes will use one or multiple axle suppliers for the Alabama plant, which now gets its axles from ZF Group NAO's factory in nearby Tuscaloosa, Ala.

Diesels and SUVs

Mercedes' Alabama plant also will help lead the brand's charge into the U.S. diesel market. In the first six months of 2007, diesel versions of the M class made up 20 percent of sales, R class diesels 18 percent and GL class diesels 14 percent. Next year, Mercedes will launch the Bluetec exhaust treatment system in all three models.

As the exclusive producer of the M, R and GL class vehicles, the plant is considered the cradle of Mercedes SUVs, which accounted for 28 percent of the brand's U.S. sales last year. The GL class, Mercedes' first full-sized SUV, went on sale in May 2006.

"SUVs are a major area of this cooperation. Therefore, MBUSI is very much involved," Zetsche said during the plant's anniversary celebration.

Breather from growth

Mercedes officials said no expansions are expected at the plant in the near future. Production of the GLK, a smaller version of the GL class that Mercedes will begin offering in the 2009 model year, is scheduled for Mercedes' factory in Bremen, Germany.

Zetsche declined to say whether Mercedes considered the Alabama plant for the GLK but pointed out thatthe factory has its hands full at the moment.

"The paint isn't dry on the last equipment that we brought in here," Zetsche said.

The plant launched three vehicles in 13 months spanning 2005 and 2006.

To accommodate the new vehicles, which included the second-generation M class, Mercedes invested an additional $600 million in the plant in 2005, doubling its size and work force.

Said Bill Taylor, CEO of Mercedes-Benz U.S. International: "In all fairness to our organization, we've been challenged pretty good over these past few years - more than anyone, I would say. We're happy to have that opportunity (the GLK), but I'd have to say we're pretty busy here.