Chrysler to spend $374 million on transmission plants in Ind.
Chrysler Group is investing $374 million into several Indiana transmissions plants responsible for building eight- and nine-speed transmissions, the company said.
After months of preliminary steps, Chrysler will invest $162 million in an empty Tipton, Ind., plant to build nine-speed automatic transmissions for front-wheel-drive vehicles. Depending on market conditions, 850 jobs could be created at the facility, which begins production in the first quarter of 2014.
Chrysler also will use an additional $212 million to purchase equipment and tooling for the Kokomo Transmission, Kokomo Casting and Indiana Transmission I plants, with up to 400 jobs created at those sites.
The automaker, in a statement, said it has invested nearly $5.2 billion in U.S. plants and added nearly 8,000 U.S. hourly jobs since June 2009.
"This is the sole region where we manufacture transmissions, and including all of the nearby facilities, it will be the largest transmission installation in the world," CEO Sergio Marchionne told workers today at one of the plants.
Marchionne, who is also Fiat CEO, is betting he can meet regulatory requirements for increased fuel efficiency primarily by improving traditional gasoline engines with the better transmissions. The strategy takes less investment than developing gasoline-electric hybrid vehicles.
"With more gears, these transmissions can run more often in their optimal speed ranges, providing both better fuel economy and vehicle performance," Marchionne said at today's event.
Chrysler plans to put the new nine-speed transmission in the Jeep Cherokee SUV and in the Dodge Dart, the Associated Press reported. Chrysler now has three transmission plants and a metal casting plant in the Kokomo area that employ about 6,100 people, the wire service said.
The Tipton plant is half an hour south of Kokomo. It originally was scheduled to employ about 1,200 people to make dual-clutch transmissions as a joint venture with German supplier Getrag. Production there is expected to begin in the first quarter of 2014, the company said.
Marchionne, Indiana Gov. Mike Pence and other state and local representatives were at the Kokomo plant for the announcement.
In December, the Tipton County Council approved a 10-year tax abatement worth $2.5 million, according to the Kokomo Tribune.
Chrysler and Getrag originally intended to make dual-clutch transmissions for Chrysler vehicles, but the venture fell apart in late 2008.
After the joint venture dissolved, Abound Solar Inc. of Loveland, Colo., made plans to build solar panels at the plant. But increased foreign competition in that industry caused Abound Solar to abandon its plans this year.
Bloomberg and Larry P. Vellequette contributed to this report.
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