DETROIT (AP) — Chrysler Group LLC gave a big boost to the battered Michigan economy Friday when it announced plans to add about 1,100 workers to help build the new Jeep Grand Cherokee.

The company made the announcement at a Detroit factory as it celebrated the start of Grand Cherokee production. Chrysler said it expects strong sales of the new sport utility vehicle, which is due in showrooms next month.

Almost all the workers will be new hires, which Chrysler can pay about $14 per hour, about half the hourly rate received by current workers represented by the United Auto Workers union. The workers will staff a second shift at the factory, called the Jefferson North Assembly Plant, starting July 19.

The announcement is good news for Michigan, which has the highest unemployment rate in the nation at 14 percent and has struggled for years with the decline of Detroit’s automakers.

CEO Sergio Marchionne joined 1,400 current plant workers and a number of federal, state and local officials to celebrate the start of Grand Cherokee production. The new vehicle is more efficient and car-like than the current model, Chrysler said.

Marchionne said the additional jobs show how confident he and other company executives are about the success of the Grand Cherokee.

When asked whether the hirings are a gamble based on the state of the economy, Marchionne smiled and said: “Don’t be so skeptical. It’s a good day. Enjoy it.”

Chrysler has only about 100 laid-off workers in the Detroit area who haven’t been recalled, so the company can take advantage of a provision in its contract with the UAW that gives newly hired workers much lower wages and benefits.

Thousands of factory workers took buyout and early retirement offers when Chrysler ran into financial difficulties in 2008 and last year. The company eventually went through bankruptcy protection, cleansing it of burdensome debt.

“This day will go down in history that Chrysler is indeed the comeback kid,” United Auto Workers Vice President General Holiefield said.

At the celebration, Marchionne, who also heads Italy’s Fiat Group SpA, drove one of the new sport utility vehicles through the plant and to a stop in front of the stage. He and front-seat passenger Michigan Gov. Jennifer Granholm emerged from the SUV to applause from the workers.

“We’re here to declare that Chrysler is back!” Granholm shouted.

Chrysler Group LLC began making the Grand Cherokees in recent weeks, and Friday’s event served as the official launch.

The start of production was eagerly awaited by Chrysler dealers, who have been without a totally new product since the Ram pickup came out late in 2008.

Mike Andretta, owner of a Chrysler dealership in Beaver Springs, Pa., says he’s hoping the new vehicle will be a boost to his bottom line.

“We’re surviving month-to-month. We need new product — quickly,” he said. “The old Grand Cherokee’s been kind of dead for the last two years now, so that market we don’t really get a lot of business in any more.”

“Once the word gets out, I think it’s going to be a success,” Andretta said. “I don’t think any dealership will survive solely on the new Jeep Grand Cherokee, but it’ll help, and we need new stuff.”

The jobs and new product celebration capped a busy week for Chrysler. On Thursday Marchionne said the company is considering a public stock offering sometime next year.

Marchionne said there is enough demand in the marketplace to support initial public offerings for Chrysler and General Motors Co., both of which were restructured in government-funded bankruptcy protection cases last year.

He also said Chrysler struggled through a painful restructuring last year, and he never wants to see the company lose money again, predicting that U.S. vehicle sales will top 11 million this year and 12 million in 2011.

Sales slumped to 10.4 million last year, the worst in more than a quarter century.

Chrysler would have been sold off in pieces in late 2008 or early 2009 if the U.S. government had not stepped in with billions in aid. The government put Marchionne in charge of turning around the Auburn Hills automaker and gave Fiat a 20 percent stake in the company.

But on Friday, Marchionne was all smiles, talking about the “milestone launch” of the Jeep Grand Cherokee, a totally new version of the venerable SUV.

The new model is more efficient than the old one, behaving more like a car than a truck on suburban highways. Yet it still has off-road capability, the company said.

Governor Granholm was just happy to see jobs added in Michigan rather than southern states, where Asian and European automakers have set up factories.

“It’s not made in some Southern cornfield plant,” she said. “It’s made right here.”

AP Auto Writer Tom Krisher in Detroit contributed to this report.

May 20, 2010

With a stratospheric unemployment rate and major job loss throughout Detroit, it seems there’s no room for small businesses to thrive.

But despite the city’s severe economic problems, it appears its Hispanic business community is flourishing.

Detroit’s Latino population has more than doubled in the past 10 years. Mexicans came in droves during the 1990s and continue to trickle in. There are roughly 400,000 Latinos in Michigan; half of them live in Detroit. Many work in construction, landscaping and the service industry. But hundreds have opened food-related businesses.

A Growing Demand For Mexican Food

Sitting in the shadow of the Ambassador Bridge, a busy border crossing in the U.S., is an unusual Detroit neighborhood, one with beautiful homes and manicured lawns. It’s known as Mexican Town.

The buildings are renovated and the main street bustles. There are bakeries, family-owned grocery stores like Algo Especial, and a thriving restaurant scene. Nearly 30 new Mexican restaurants have sprung up here in just the past few years.

Mexican immigrant Norberto Garita opened one of them. He trained by making salads at other restaurants and became sous chef. Then Garita opened his own restaurant, El Barzon.

Garita says he opened his restaurant in Detroit because of cheap rent and the chance to buy his own building. His cooking style has garnered rave reviews, making El Barzon a Mexican Town favorite.

Lydia Gutierrez owns Hacienda Mexican Foods. Her company turns corn into tortillas and chips, which are sold in stores and restaurants in 15 states. The business started with two employees in 1990 — but now operates out of three buildings with more than 100 workers.

Gutierrez says that three years ago, she needed more space and bought a 33,000-square-foot building here.

“The need for Mexican food products continues to grow in demand, where at one time, 10 to 15 years ago primarily, the Mexican food was primarily for Mexicans,” she says. “It’s continued to grow because of the exodus of people from Mexico to the United States — and teaching the Americans how to eat this wonderful product, these wonderful tortillas.”

Entrepreneurial And Good Spenders

Experts say Detroit’s Mexican community has seen a 34 percent increase in small business development in just the past three years. Jim Johnson, who teaches economic development at the University of North Carolina and studies the Hispanic business community, says Mexican immigrants are among the most entrepreneurial, spurring significant new business growth.

“Even in areas and sectors of the economy where you have massive job loss, the one population that typically is growing is the Hispanic labor force,” he says.

Johnson says some of the economic boom in Detroit’s Hispanic community is because Latinos are good spenders.

Research shows that only about 20 percent of the money goes home through remittances, so the remaining 80 percent is spent in our local economy.

He adds that with little fanfare, immigrants are generating new economic development as well as jobs at astonishing rates, especially in Detroit’s small business sector.

By COREY WILLIAMS, Associated Press Writer Corey Williams, Associated Press Writer

DETROIT – Former Detroit Mayor Kwame Kilpatrick was sentenced to up to five years in prison Tuesday for violating the terms of his probation on an obstruction of justice conviction.

Kilpatrick, 39, asked Judge David Groner to show him compassion during the hearing, but Groner said “that ship has sailed.”

Groner said Kilpatrick would have to serve at least 1 1/2 years in prison, but that he would be credited for 120 days of time served from his original sentence. He is still obligated to pay back the remaining balance of his $1 million debt to the city of Detroit.

Kilpatrick, the father of three young sons, was led from the courtroom in handcuffs.

Groner ruled last month that Kilpatrick failed to report all of his assets and meet other conditions of his probation. In court Tuesday, Groner scolded Kilpatrick for his continued lack of candor about his finances.

“Your continued attempt to cast yourself as the victim, your lack of forthrightness, your lack of contriteness and lack of humility … clearly rehabilitation has failed,” Groner told Kilpatrick after the former mayor spent about 15 minutes explaining why he should be allowed to return to his family in Dallas.

After Groner announced the sentence, a loud, collective gasp rose from many of Kilpatrick’s supporters in the packed courtroom. Kilpatrick appeared shaken.

At issue is $1 million in restitution Kilpatrick owes the city after pleading guilty in 2008 to obstruction of justice. Sexually explicit text messages showed Kilpatrick, a Democrat, had lied under oath about an affair with a staff member.

State Corrections officials suggested Kilpatrick should spend less than a year in county jail. Defense attorneys wanted no jail time, saying it would hamper Kilpatrick’s ability to pay the money he still owes. But prosecutors said two to five years in state prison would be appropriate.

After he was released from jail in February 2009, Kilpatrick found a job as a medical software salesman with Dallas-based Covisint. Since then, he has said he is working on his marriage and trying to be a better father to his three sons. He also has been making $3,000 monthly payments to the city of Detroit, saying he hopes to repay everything he owes.

But prosecutors contend he continues to lie — that Kilpatrick could afford to give more and has intentionally hid assets.

Groner agreed, saying Kilpatrick failed to disclose $240,000 in loans from prominent businessmen. He also said Kilpatrick failed to surrender nearly $23,400 in tax refunds and a share of cash gifts from two people.

April 21, 2010: 3:36 PM ET

 NEW YORK (CNNMoney.com) — General Motors’ announcement Wednesday that it’s investing $120 million in a Detroit auto plant is an encouraging sign for many in this hard hit city.

“Investment of that amount means long-term job security,” said Tom Summers, vice president at union Local 22, which represents workers at the plant that straddles the Detroit-Hamtramck border. “And it shows that Michigan is still a centerpiece of manufacturing.”

The investments are designed to produce the next generation of the Chevy Malibu, GM’s best selling car, in the facility located just 5 miles northeast of downtown Detroit.

The Malibu is currently made at a Kansas City plant. It was also made at a factory about a half hour drive northeast of Detroit, but that plant is being retooled to make a smaller car.

Summers said 100 or so furloughed workers at the Hamtramck plant should be brought back, and maybe even new ones hired, over the next couple of years.

Ultimately, he said GM plans on running the factory three shifts a day, which could entail at least doubling the workforce. The plant currently employs just over 1,000 people and runs one shift a day.

GM could not immediately be reached for comment.

The plant, which has been operation since 1985, currently makes two sedans for the company, the Cadillac DTS and the Buick Lucerne.

It also makes GM’s much-hyped plug-in electric car, the Chevy Volt, set to go on sale later this year.

Last year, GM said it is putting over $300 million worth of investments into the plant to make the Volt.

Summers said the Cadillac and Buick models will ultimately be phased out.

For the city, the investments represent a much-needed economic boost.

Unemployment in the Detroit metro area, which includes the suburbs, is over 15%, a third higher than the national average. In Detroit proper, it’s a jaw-dropping 25%.

City leaders have been trying to bring new industry to Detroit for years, with mixed success.

Some in the city, notably in the business community, have said that even if U.S. automakers started hiring again in a big way, they wouldn’t be likely to invest heavily in Detroit or in any of the northern manufacturing states, preferring to go to cheaper southern states instead.

Wednesday’s announcement seemed to counter that logic, at least for the moment.

“This investment affirms that Detroit is and always will be the Motor City,” Mayor Dave Bing said in a statement. “As we work to attract new jobs and investment, the auto industry will continue to play a vital role as employers and taxpayers.”  

Commercial real estate investors face another bleak year in 2010, but the market appears to be bottoming out nationally and in metro Detroit, a leading real estate firm said in its annual forecast Monday.

“Many have called commercial real estate ‘the next shoe to drop,’ but that’s really an exaggeration,” said Bob Bach, senior vice president and chief economist of Grubb & Ellis, which has an office in Southfield. “It implies that commercial real estate could wreak damage on the financial system equivalent to the subprime residential mortgage losses, which is highly unlikely because the value of outstanding commercial mortgages is a fraction of the value of outstanding residential mortgages.

“Nevertheless, losses will mount over the next several years. If banks aren’t lending because they’re coping with losses in their real estate portfolios, this could impede the economic recovery.”

Locally, a more stable, leaner automotive industry should encourage potential investors to give Michigan another look in 2010, the company’s annual forecast said. While rents and building occupancy are down, pricing is also at record-low levels, presenting opportunities for those willing to invest in the region.

The credit crunch and nationwide real estate crash affected all sectors of commercial real estate last year, including office, industrial and retail, both nationally and locally.

Commercial real estate, especially the office and industrial markets, closely tracks the broader economy. With Michigan’s automotive sector devastated in recent years and state unemployment topping 15% in 2009, it’s no surprise that metro Detroit has been posting some of the highest commercial vacancy rates and lowest rental rates in the nation.

In one stunning indicator of the local market woes, Grubb & Ellis reported that the dollar volume of investment in metro Detroit’s industrial real estate market fell to $32.7 million in 2009, a drop of 95% from the $600 million invested the year before.