Chrysler's Sterling Heights Assembly Plant near Detroit, once scheduled for closure, may one day be the automaker's highest-producing plant, Chief Executive Sergio Marchionne said on Monday.

Marchionne also affirmed that Chrysler plans an initial public offering in the second half of 2011 and that he will remain CEO of the U.S. automaker after that is completed.

"It will give us a chance to clean up a few things," he said. "And the more important thing is to prove traction in the marketplace with these products."

Marchionne, CEO of Italy's Fiat SpA (FIA.MI) and Chrysler, said the Sterling Heights plant, known by its acronym SHAP, may build Alfa Romeo cars in three years.

Chrysler is investing $850 million to make the plant more flexible and a good fit to produce vehicles now made by Fiat and Alfa Romeo in Europe, Marchionne told reporters at an event to mark the addition of a second shift starting in early 2011.

"It needs to be able to deal with a variety of vehicles off the architecture and I wouldn't be surprised if there was an Alfa Romeo that rolled off these lines in the next 36 months," Marchionne said.

But Marchionne stopped short of saying precisely what model could be added to the plant's production in 2013.

"There's a huge amount of flexibility of what can be built," Marchionne said. "The plant is being built with the very clear objective of retaining the highest level of flexibility to deal with both cars and SUVs."

Marchionne said the future of the plant is pretty much assured, barring a collapse of the auto market. Chrysler emerged from a government-funded bankruptcy in 2009 under the management control of Fiat after just such a market collapse.

The alliance with Fiat has given Chrysler access to small car technology critical to remaking a lineup reliant on large SUVs and pickup trucks. It also gives Chrysler access to international markets.

The Sterling Heights facility in a suburb north of Detroit ultimately "could be the largest plant that we have in terms of output," Marchionne said. "We need to see if there is demand for the architecture."

Chrysler is adding a second shift, and 900 jobs, at the plant early next year to bring total employment there to 2,100. It would have to add a third shift to make the plant Chrysler's top producer. It has no timeline for adding a third shift.

The possibility of the plant's survival was unthinkable two years ago. The Sterling Heights plant had been scheduled to close by the end of this year until a series of reprieves from Chrysler.

Marchionne told workers the revamping and expansion of the plant is "another step in Chrysler's comeback story."

Chrysler's overhaul includes 16 new or significantly changed vehicles across its brands. It is building the Chrysler 200, a replacement for the critically panned Sebring sedan, and a redesigned Dodge Avenger at the Sterling Heights plant.

Marchionne said it cost Chrysler more than $1 billion to revamp the 16 models, and about $300 million for the makeover leading to the Chrysler 200 and the Avenger. (Reporting by Bernie Woodall; Editing by Phil Berlowitz)