Chrysler purchases mid-size sedan plant from bankrupt Old Carco

Chrysler's Sterling Heights Assembly Plant was earmarked for closure following the company's bankruptcy filing last year, but the Michigan factory will remain open until at least 2012 thanks to a recent purchase agreement.

The Sterling Heights plant had been under the control of Chrysler's bankruptcy entity - Old Carco LLC - but a bankruptcy court has approved Chrysler's purchase of the Michigan factory. Chrysler purchased the factory from Old Carco LLC for $20 million.

The Sterling Heights plant produces the Chrysler Sebring and Dodge Avenger, and will continue to do so through 2012. Updated versions of both sedans are expected to bow by year's end, but the Sebring will likely be renamed. Fiat-based models will replace the Sebring and Avenger in 2013, but Chrysler has yet to announce where those vehicles will be made.

The plant will retain its 1,200 employees.

In addition to the plant sale, Chrysler has agreed to give Old Carco LLC's Kenosha, Wisconsin plant the rights to the company's current V6 engines. The Kenosha plant produces 2.7L and 3.5L V6 engines for the Sebring and Avenger. The move is expected to improve the salability of the pant when it officially goes up for sale later this year.

Although Chrysler's current V6s have essentially run their course in the U.S. market, they are expected to be purchased by a Chinese or Russian firm. Chrysler will soon replace the engines with an all-new 3.6L unit.

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