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Chrysler to add jobs, invest $374M in Kokomo area

Published on NewsOK Modified: February 28, 2013 at 3:15 pm •  Published: February 28, 2013
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KOKOMO, Ind. (AP) — Chrysler is investing millions in the Kokomo, Indiana, area as it shifts most of its vehicles to new transmissions that save fuel and better suit the driving habits of Americans.

The automaker will invest nearly $400 million at four plants in the Kokomo, Indiana, area, adding 1,250 jobs to what it says it the largest transmission factory complex in the world. The plants will make fuel-efficient eight- and nine-speed automatic transmissions.

Chrysler plans to use the new nine-speed transmission in key front-wheel-drive vehicles such as the Dodge Dart compact, which has lagged sales expectations. The transmission also will go into a new Chrysler 200 midsize sedan early next year and the Jeep Cherokee midsize SUV, which will replace the aging Jeep Liberty in the summer.

It's a big deal for Kokomo — and the economy of central Indiana — considering that the complex was in danger of being shut down just a few years ago.

Kokomo will also add the Ram pickup, by far Chrysler's top-selling vehicle, to the line-up of cars that it makes eight-speed transmissions for. The others are the Jeep Grand Cherokee large SUV and the Chrysler 300 big sedan.

Most manufacturers rely on five- and six-speed transmissions to move their cars and trucks. But Chrysler and others are planning for more gears. Generally, transmissions with more gears help cars and trucks get better mileage because engines always run at peak efficiency and don't have to work as hard at highway speeds. They also allow cars to accelerate faster, which is a demand of American motorists.

CEO Sergio Marchionne confirmed Thursday that Chrysler will spend $162 million and add 850 new jobs at an unfinished Getrag Transmission plant in nearby Tipton. The company will spend another $212 million for new equipment and tooling at three other factories, creating up to 400 more jobs.

Four years ago, as Chrysler was going through bankruptcy protection, the sprawling complex in Kokomo was in danger of closing, which would have had serious economic implications. Marchionne, who also is CEO of Italy's Fiat Group SpA, said he remembers leaning toward buying transmissions from an outside company.

"This would have been an economic hole right here in central Indiana," said George Maus, president of one of the United Auto Workers locals in the city.

But people in the company's powertrain operations sold the CEO on keeping Kokomo open.

Shortly after he started running Chrysler, Marchionne came to Kokomo to tell workers of the decision. But company sales were still bleak at the time. "When Sergio told us he was going to add 700 to 800 jobs, we thought he was crazy," Maus recalled.

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