DETROIT -- Chrysler Corp. Monday said it will break ground later this week for its $800-million Auburn Hills Technical Center, a 10-year project that will mean the transfer by 1990 of about half the carmaker's 10,000 employees from its Highland Park headquarters.
The construction of the new complex on a 500-acre site about 25 miles north of Detroit has concerned Highland Park, a struggling city surrounded by Detroit, because the move could cut its tax revenues by about $2 million, or 30 percent, according to city officials who last week called on Chrysler to disclose more information on the planned move.
Chrysler Chairman Lee A. Iacocca, after announcing the No. 3 carmaker's third-quarter profits last week, said the construction of the new complex 'isn't a flight to the suburbs.
'This is (being done) because we need our test track, we need our dynamometers (engine testing machines), we need everything together,' he said, adding that Highland Park will remain Chrysler's headquarters.
Iacocca, aided by Michigan Gov. James Blanchard and local officials, will turn over the first shovel for the new center this Thursday.
Last week, Chrysler announced it plans to spend $1 billion to rebuild its aged Jefferson Avenue assembly plant in Detroit, creating a new truck complex by 1992.
Iacocca said Chrysler intends to be a 'good citizen' and help Highland Park find new sources of revenue. He suggested building a supplier complex but did not elaborate.
'Obviously, we have an obligation,' he said, adding that 'sure, it's a blow to Highland Park, a small city.'
Highland Park Mayor Robert Blackwell said last week he hoped to meet with Chrysler representatives soon. He said that while the automaker and the state have been developing plans for the complex, they have not been involved in any meetings.
'We're the last ones to know,' Linsey Porter, a Highland Park council member,told a Detroit newspaper last week.
He said Chrysler has expressed an interest in developing a shopping center or housing complex in Highland Park but that those plans are 'nothing' compared to the projected tax losses.
Iacocca said the Liberty project, Chrysler's program to reduce the design and manufacturing costs of building new cars, will be among the first programs to move there.
Iacocca said the move is important because Liberty's goal to cut about $2,500 from the cost of building each car cannot be accomplished unless engineers are together in one complex.
