Chrysler poised to invest $266M to expand 8-speed transmission production

Chrysler Group plans to invest $266 million into its massive Kokomo Transmission complex to expand production of its eight-speed rear-wheel-drive transmission.

On Monday night, elected officials in Kokomo, Ind., unanimously approved a request by Chrysler for a 10-year tax abatement for the project, local media reported.

The eight-speed automatic transmission is built by Chrysler in Kokomo under license from ZF Friedrichshafen. The automaker said in a recent SEC filing that the eight-speed ultimately will be used in all of its rwd vehicles except for the Dodge Viper and certain heavy-duty Ram pickups.

As Automotive News first reported, that would include the Jeep Wrangler, which currently has a five-speed automatic and is being redesigned for the 2018 model year.

The fuel-efficient eight-speed delivers up to 9 percent better fuel economy than the five-speed and six-speed transmissions they replaced in Chrysler vehicles, the company’s SEC filing said.

Chrysler spokeswoman Jodi Tinson said the investment in Kokomo is not yet confirmed. The $266 million would be in addition to the $1.5 billion that the automaker already has invested in the 3.1 million-square-foot complex since 2009. Chrysler employs about 7,600 people there.

In a written statement, the automaker said the additional investment “will give the Company the flexibility to respond to the market” with more fuel-efficient vehicles. Chrysler said the abatement would “retain employment, subject to market conditions.”

Chrysler also noted today the Kokomo plant has been awarded a "bronze" designation for its implementation of the World Class Manufacturing system.