TIPTON, Ind. -- Chrysler Group began producing new fuel-saving transmissions last month at a plant here that it once abandoned.
The nine-speed automatics are being produced at a 782,000-square-foot plant about an hour north of Indianapolis. The transmissions will be used in the 2014 Jeep Cherokee and 2015 Chrysler 200 and later will be shipped to Fiat Chrysler Automobiles assembly plants in Europe, Asia and South America.
The nine-speed -- licensed from German supplier ZF Friedrich-shafen AG -- is key to Chrysler's efforts to improve the fuel economy of cars, crossovers and SUVs based on front-wheel-drive platforms.
In the redesigned 2015 Chrysler 200, the nine-speed helps the mid-sized sedan achieve up to 36 mpg highway. That is 5 mpg better than the 2014 Chrysler 200 with a six-speed automatic.
Chrysler bought the empty Tipton factory in February 2013 for $162 million to expand production of the nine-speed transmission. The building was constructed to house a joint venture between Chrysler and Getrag, but that project was abandoned in 2008 before Chrysler's bankruptcy.
The building later was sold to a solar energy company, but that project also was abandoned before production began.
"Finally," said Tipton Mayor Don Havens to cheers from hundreds of workers and invited guests for the plant's official dedication on Tuesday, May 13. The plant, built in part with public funds, had been vacant since its construction.
The plant has 204 workers, but employment is expected to rise to about 850 by late 2015 as transmission production increases to about 800,000 units a year.
Addressing other subjects at the dedication, Fiat Chrysler CEO Sergio Marchionne declined to say how the company plans to build 200,000 additional Jeeps in North America by 2018 when two of its four Jeep assembly lines are at nearly full capacity.
He said executives continue to study the issue, but he would not rule out expanding some Jeep plants to address capacity constraints.
Marchionne also discussed the decision to locate Fiat Chrysler Automobiles' headquarters in London.
"I can't run a company through iClouds," he said. "I actually need a physical body. The board needs to meet at a place. The executives must have a point of reference, and it's London."