Updated at: 12/10/2012 4:36 PM
By TOM KRISHER
(AP) DETROIT - The Detroit Diesel Corp. used a visit from President Barack Obama to announce that it will add 115 jobs and invest millions at a huge factory near the city.
The company, which makes heavy-duty diesel truck engines, said it will invest $120 million at the plant in Redford Township, Mich., to build a new transmission and turbocharger.
The United Auto Workers union agreed to production flexibility, and the state of Michigan offered incentives to make the expansion happen, Detroit Diesel said in a statement.
The new 12-speed manual transmission has computer-controlled shifting and clutches so it performs like an automatic, yet has the efficiency of a manual, said Detroit Diesel, which is owned by Germany’s Daimler AG. The new turbocharger improves performance but saves weight and is simpler than previous models, according to the company.
The president visited the plant Monday to build support for his plan to avoid the "fiscal cliff," the combination of tax hikes and spending cuts that are to take effect in January unless a budget deal is reached. Obama toured the 3-million-square-foot plant and spoke to workers.
Detroit Diesel has been in business since 1938. The Redford plant now employs about 2,300 people, according to the company’s website.
The "fiscal cliff" refers to rate increases that would affect every worker who pays federal taxes, as well as spending cuts that would begin to cut into defense and domestic programs alike. Economists say the combination carries the risk of a new recession at a time the economy is still struggling to recover from the worst slowdown in decades.
The country faces the fiscal cliff because tax rate cuts put in place during the administration of former President George W. Bush expire at the end of the year. Obama campaigned during his successful run for a second term to keep the cuts in place for all but the top 2 percent of U.S. earners. Many Republicans want to find additional government income by cutting back on tax loopholes and deductions while leaving tax rates unchanged.
The pending across-the-board reductions in government spending, impacting everything from social programs to the military, were put in place last year as an incentive to both parties to find spending reductions. That legislation grew out of the two parties’ inability in 2011 to agree to a tax and spending to significantly reduce the nation’s budget deficit.
During the Detroit visit, Obama blasted right-to-work legislation that Republicans pushed through the state House and Senate last week. Obama mocked the "right to work" label supporters have used to describe the efforts to prohibit requiring non-union employees to financially support unions at the workplace. He said the law will give workers the right to work for less money.
(Copyright 2012 by The Associated Press. All Rights Reserved.)