Chrysler confirms plans to build Fiat 500 engine in Michigan

Chrysler CEO Sergio Marchionne announced yesterday that the automaker will use a currently idled Michigan plant to build a small 1.4-liter four-cylinder gas engine for the forthcoming Mexican-built, North American-specification Fiat 500.

The engine will not be built alongside the Fiat in Saltillo, Mexico, but rather in Dundee, Michigan. It's expected that other future Chrysler-badged, American-assembled products will also utilize the powertrain.

A few weeks ago, Michigan offered about $5 million in tax credits to Chrysler to encourage the automaker to build the engine at the idle Dundee plant.