DETROIT (Reuters) - Chrysler Group LLC will expand its plant in Mexico to build more of the "Tigershark" engines that will go into many of its passenger cars, sources with knowledge of the issue said on Tuesday.
Chrysler is to spend $164 million to expand the plant, and about 500 jobs will be added, the sources said.
On Thursday, Chrysler Chief Executive Sergio Marchionne and Mexican President Enrique Pena will be at the Saltillo Engine Plant in Ramos Arizpe in the Mexican state of Coahuila to formally announce the investment and new jobs, a Chrysler spokesman said.
The 2-liter and 2.4-liter Tigershark engines are now only in two vehicles, the Dodge Dart and the Jeep Cherokee, but will be in future products as they are launched.
There are more than 10,000 Cherokee vehicles that have been produced but have not yet shipped to dealers from Chrysler's Jeep plant in Toledo, Ohio. Chrysler has said it is fixing issues related to the rollout of the nine-speed automatic transmission.
It is the first time a nine-speed transmission is being used in a vehicle.
The Saltillo Engine Plant now makes the 5.7-liter and the 6.4-liter HEMI engines for larger Chrysler products including the Ram 1500 pickup truck, the Chrysler 300, the Dodge Charger, Dodge Challenger and Jeep Grand Cherokee.
There are about 1,030 hourly and 174 salaried workers at the plant, Chrysler said.
Near Ramos Arizpe, in Saltillo, are three more plants, including one engine plant, a stamping plant and an assembly plant, which makes Ram pickup trucks.
Total Chrysler employment at all four of the plants in or near Saltillo is about 5,000.
Bloomberg News reported the expansion of the Saltillo Engine Plant earlier on Tuesday.
(Reporting by Bernie Woodall)