Traverse City Record-Eagle

Business

December 11, 2012

Engine plant due for $120M upgrade

Detroit Diesel says it will add 115 jobs

DETROIT (AP) — The Detroit Diesel Corp. used a visit from President Barack Obama to announce that it will add 115 jobs and invest millions at a huge factory near the city.

The company, which makes heavy-duty diesel truck engines, said it will invest $120 million at the plant in Redford Township, Mich., to build a new transmission and turbocharger.

The United Auto Workers union agreed to production flexibility, and the state of Michigan offered incentives to make the expansion happen, Detroit Diesel said in a statement.

The new 12-speed manual transmission has computer-controlled shifting and clutches so it performs like an automatic, yet has the efficiency of a manual, said Detroit Diesel, which is owned by Germany's Daimler AG. The new turbocharger improves performance but saves weight and is simpler than previous models, according to the company.

The president visited the plant Monday to build support for his plan to avoid the "fiscal cliff," the combination of tax hikes and spending cuts that are to take effect in January unless a budget deal is reached. Obama toured the 3-million-square-foot plant and spoke to workers.

Detroit Diesel has been in business since 1938. The Redford plant now employs about 2,300 people, according to the company's website.

The "fiscal cliff" refers to rate increases that would affect every worker who pays federal taxes, as well as spending cuts that would begin to cut into defense and domestic programs alike. Economists say the combination carries the risk of a new recession at a time the economy is still struggling to recover from the worst slowdown in decades.

During the Detroit visit, Obama blasted right-to-work legislation that Republicans pushed through the state House and Senate last week. Obama mocked the "right to work" label supporters have used to describe the efforts to prohibit requiring non-union employees to financially support unions at the workplace. He said the law will give workers the right to work for less money.

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