CNN Financial News Producer
Seven weeks after going bankrupt, Chrysler will soon be making cars again - and the first models off the line could cost more than $90,000.
The newly-formed Chrysler Group announced yesterday that it’s restarting one factory - the Conner Avenue Assembly Plant in Detroit - which employs 115 people.
That’s the plant that makes the Dodge Viper sports car. The Viper has a 600 horsepower V-10 engine and a manufacturer’s suggested retail price tag that starts at $91,220. Only 25,000 Vipers have been sold since the car debuted in 1992.
One interesting note: The old Chrysler sought out Italy’s Fiat as a partner for its fuel-efficient technology. But the first car expected off the line from the new Chrysler – the Viper – gets an estimated 13 mpg in city driving.
GM finds buyer for Saab
Bankrupt automaker General Motors has reached a preliminary agreement to sell its money-losing Saab unit to Swedish sportscar maker Koenigsegg.
The deal would see Saab, which was put up for sale earlier this year, emerge from two decades under the umbrella of GM.
The sale, which is expected to close by the end of the third quarter of this year, includes an expected $600 million funding commitment from the European Investment Bank guaranteed by the Swedish government.
Koenigsegg, which employs a mere 45 workers, is known for producing only a handful of exotic sports cars every year that typically cost more than $1 million a piece.
Saab sold fewer than 94,000 cars last year, down from about 125,000 in 2007.
New home construction surges
The nation's builders boosted their production sharply in May.
Housing starts – a measure of new home and apartment construction - jumped more than 17% last month after hitting a record low in April. That's the biggest jump in 3 months and is due mainly to a 60% spike in construction of multi-family units.
Meanwhile, building permits - a sign of future construction activity - rose by a better-than-expected 4%.
Inflation in check
Separately, a new reading on wholesale prices shows inflation is in check.
The Producer Price Index rose just 0.2% in May. That’s much less than expected. And even though gas prices have been rising, that was offset by a drop in food costs.
Over the past year, wholesale prices have fallen by 5% - the biggest drop in nearly 60 years.
Tomorrow, we'll see how this is affecting prices at the consumer level when we get the Consumer Price Index for May.
Gas tops $3 per gallon in California and Hawaii
Gas prices rose 5-tenths of a cent overnight to $2.674 - the 49th consecutive increase.
In the last 49 days the average price of gas has increased 62.6cents or 30.5%.
The average price of a gallon of gas is down $1.44 or 35.1% from the record high price of $4.114 that AAA reported on July 17, 2008.
The highest gas prices are in California ($3.014). The cheapest gas prices are in South Carolina ($2.477)
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