Chrysler Group LLC plans to invest a total of $374 million at four plants in Indiana to increase production of fuel-efficient transmissions. At an announcement in Kokomo, IN, Chrysler Group chairman and CEO Sergio Marchionne confirmed that $212 million is targeted for the Kokomo Casting, Kokomo Transmission, and Indiana Transmission I plants; and $162 million will be invested to buy and expand the Tipton (Ind.) Transmission Plant, a former Getrag Transmission operation.
In total the investments will lead to an estimated 1,250 new jobs at the four sites, the company predicted.
Chrysler began its current round of investments at the three Kokomo plants more than two years ago. Kokomo Casting and Kokomo Transmission were the objects of a $300-million program announced in 2010 as it began production of a new eight-speed transmission, and the Indiana Transmission Plant I was set with an $843-million improvement plan later that year.
Chrysler said the new projects would raise total capital investments at the three locations above $1.6 billion.
The automaker did not detail the improvements at the aluminum foundry and the two transmission plants there, but its goal is to increase capacity for eight-speed transmissions that will be installed in the Dodge Dart compact and two new products: the Chrysler 200 midsize sedan, and Jeep Cherokee midsize SUV.
Chrysler believes that its eight- and nine-speed transmissions have a dual appeal to North American auto buyers: first, fuel-economy, as the higher number of gears gives tighter control of engine performance; and second, performance, as the greater gear range improves acceleration.
Construction starts soon
Construction work at the first three plants will start in the second quarter of this year, and new equipment and tooling will be installed during the fourth quarter.
The automaker describes Kokomo Casting as “the world’s largest die cast facility.” It casts aluminum for automotive components, transmission and transaxle cases, and engine blocks.
Kokomo Transmission machines aluminum block castings and aluminum and steel transmission components, and also assembles several different four-, six-, and eight-speed transmissions.
The Indiana Transmission I plant produces a similar range of transmissions.
The Tipton Transmission Plant project is a revival of an earlier plan that Chrysler’s former ownership initiated as a joint venture with Getrag, a transmission and powertrain components supplier. The project foundered when Chrysler during the global financial collapse of 2009, but is getting a revival as Chrysler builds capacity for its nine-speed automatic transmissions.
The original project was to produce 700,000 dual-clutch transmissions per year in an 804,000-sq.ft. operation.
Chrysler will be the sole owner of the plant, and though it has not indicated the production volumes for its new program, it indicated that manufacturing would begin in the first quarter of 2014.
“Our investments in Kokomo and Tipton are a tribute to the character of the men and women of Chrysler who survived a near-fatal experience and have embraced the challenge of building an enterprise that is able to compete with the best in the world,” according to Marchionne. “Our powertrain team has consistently demonstrated the ability and the willingness to think in unconventional ways in order to exceed expectations.
The chairman thanked Indiana’s governor, local city and county leaders, and United Autoworkers union officials for their work to secure the investment program for the four plants.