Chrysler LLC's source of dual-clutch transmissions in the United States is jeopardized by a factory-building dispute with supplier Getrag Transmission Manufacturing LLC.

Chrysler yesterday sued Getrag in Michigan, alleging that the German supplier failed to raise up to $300 million in debt financing necessary to build and equip a plant in Tipton, Ind., to produce the transmissions.

The plant was expected to open in the fall of 2009.

Getrag was expected to be Chrysler's sole source of dual-clutch transmissions in the United States. The dispute now casts the project in question, said Chrysler spokesman David Elshoff.

A Getrag spokeswoman declined comment on the matter.

Work continues on plant

A dual-clutch transmission saves fuel because it has two clutch sets inside the transmission that allow faster shifts. It also offers an automatic shifting option.

Chrysler uses Germany-built Getrag dual-clutch transmissions on the European version of its Dodge Journey crossover. The automaker also is planning to use the fuel-saving transmission in Europe on the Chrysler Sebring and Dodge Avenger sedans.

Chrysler has not yet disclosed which vehicles would get the dual-clutch transmission in the United States.

Elshoff said work at the construction site continues today. But he would not say whether work is planned beyond that point.

Under the partnership, Chrysler had agreed to be the main customer for the 700,000 transmissions built annually at the plant.

The total cost of the plant was originally estimated at about $530 million. About 1,200 Chrysler employees were to staff the plant.

In the lawsuit, Chrysler seeks damages for any delays the dispute might cause and additional costs that the automaker may incur for changing transmission vendors.

The automaker also wants the court to relieve Chrysler of any reimbursement of costs already absorbed by Getrag.

The complaint says that Chrysler had agreed to a price increase on the transmissions to get Getrag to sign a definitive agreement for the project. Getrag had balked at the agreement and briefly stopped work at the construction site in December 2007, the lawsuit says.

Chrysler alleges that Getrag had assured Chrysler that it could raise the debt financing. The lawsuit says Getrag did not make a good faith effort to get the money.

The lawsuit indicates that Getrag had sought to line up the money from German banks as long as it was guaranteed by the German government.

Chrysler argues that it should have been informed of that condition before signing the definitive agreement. As it turned out, the German government would only guarantee the debt if Chrysler set up a $300 million escrow account to assure repayment, the lawsuit says.