Chrysler to improve supply chain efficiency by opening plants in Kokomo, Indiana

Chrysler, Ford and GM - the so-called "Big Three" of U.S. car makers - were on the verge of collapse just 16 months ago. Now, however, with their restructuring ostensibly working, Chrysler announced that it will open up new manufacturing facilities as it endeavors to increase supply chain efficiency and reduce extraneous business costs.

Chrysler will pour more than $840 million into three new factories that will build a new front-wheel-drive system its engineers have developed. Chrysler asserts that other important parts in its production line are assembled in the area and that investing in facilities there will both save jobs and reduce transportation costs.

Chrysler's investment will ensure that the town of Kokomo, Indiana, where the plants are located, will keep nearly 2,250 jobs. To further streamline its supply chain's efficiency, Chrysler will partner with ZF Group, a German company that will provide design and technology consulting for the new driving system. Once the factories are running, many of the parts critical to Chrysler's cars will be made within a short distance of one another, eliminating shipping costs.

Although the company cut its net third quarter loss to $84 million, Chrysler expects to end this year with a positive cash flow of $500 million.