Newspaper article THE JOURNAL RECORD

Mercedes-Benz to Build U.S. Plant

Newspaper article THE JOURNAL RECORD

Mercedes-Benz to Build U.S. Plant

Article excerpt

DEARBORN, Mich. (AP) _ The German luxury carmaker Mercedes-Benz said Monday it would begin production of new four-wheel-drive utility vehicles in the United States. But a site for the plant is yet to be chosen.

The plant, expected to employ 1,500 workers, will begin turning out the vehicles in 1997. Annual production is expected to be about 60,000 vehicles, including 40,000 for export to Europe.

The new Mercedes will sell in the $20,000-to-$30,000 range, far below the typical price of a Mercedes luxury car. The vehicle will replace the Gelandewagen 300 GE, which is sold in Europe and Japan. No other cars are planned for the plant.

Monday's announcement confirmed rumors that Mercedes would join rival BMW in building a plant in the United States. Speculation on a site for the Mercedes plant had focused on North and South Carolina because Freightliner, a subsidiary of Mercedes-Benz parent Daimler-Benz AG, has three plants in North Carolina.

BMW is building a plant in South Carolina and has attracted several suppliers to the area.

But Mercedes vice chairman and chief operating officer Helmut Werner said it will be two or three months before Mercedes picks a site. Mercedes officials denied their announcement was intended to start a bidding war among states.

"We have had a lot of phone calls, really nearly all 50 states knocking on the door," said Juergen Hubbert, Mercedes-Benz board member in charge of passenger cars. "That was not the reason for today."

Hubbert said the entire cost of the U.S. project would be about $650 million. About $300 million of that will be for the plant itself, roughly the same amount BMW has said it will spend on its plant near Spartanburg, S.C. The BMW plant is expected to be ready in 1995.

Werner said it was coincidence that Mercedes announced plans for the plant within days of becoming the first German automaker with stock approved for trading on the New York Stock Exchange. He said there are no plans to count on capital raised in the U.S. to build the plant.

The weakness of the dollar and the soaring costs of labor in Germany are compelling reasons why BMW and Mercedes-Benz picked the United States to build factories. …

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