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Chrysler Confirms $300 Million to Modernize Indiana Plants

New equipment, tooling to produce fuel-efficient automatic transmission.

Chrysler Group confirms earlier reports it will invest $300 million for improvements at its plants in Kokomo, Ind., to produce a new eight-speed automatic transmission that is central to its fuel-economy programs. It’s the largest investment the company has made since the group was formed in June 2009, and is supported by local tax concessions.

The investment covers new equipment and special tooling to modernize Indiana Transmission Plant I and the Kokomo Casting Plant. Chrysler said the projects will help it to retain nearly 1,200 jobs at the plants.

The $300 million will be invested in addition to $43 million Chrysler announced in May to cover new equipment and tooling in Kokomo to support production of Chrysler’s World Engine, and to improve processes for the 62TE transmission program.

Chrysler said it is licensing manufacturing rights from Germany’s ZF Group, beginning in 2013, to an eight-speed transmission design. (ZF, an engineering and manufacturer group, and global supplier of driveline and chassis products, will supply transmissions, too.) According to Chrysler, the new transmission will contribute to overall fuel economy improvements across the Chrysler, Dodge, Jeep, and Ram Truck product lines.

"The new eight-speed transmission that we'll be producing in Kokomo will transform our future product line, but equally important, ensures the future viability of our Kokomo facilities and our dedicated workforce," stated Scott Garberding, Chrysler Group senior vice president and head of Manufacturing.

Paolo Ferrero, senior vice president - Powertrain, said the new transmission will contribute to a corporate fuel economy improvement of more than 25 percent by 2014.

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