Chrysler Group on Tueday said it would spend $43m on new equipment and tooling to expand its operations in Kokomo, Indiana. The investment will create 399 new jobs, including up to 379 to be filled by employees called back from lay-off, plus 20 new hires in supervisory positions.

The automaker said it would increase capacity at the Kokomo casting and transmission plants, adapt them to support production of the ‘World Engine’ and improve processes for the 62TE transmission programme.

“As Chrysler Group works to implement the very robust business plan outlined on 4 November, 2009, our facilities in Kokomo will play an integral role in achieving those objectives,” said Chrysler manufacturing chief Scott Garberding in a statement. “This investment will keep our facilities at the forefront of innovation and advanced technology.”

Chrysler Group has now almost $1bn in powertrain operations since 2007. In December 2009, the company announced it would spend $179m on its Global Engine Manufacturing Alliance (GEMA) plant in Dundee, Michigan, to produce Fiat’s 1.4-litre, 16-valve Fully Integrated Robotised Engine (FIRE). In May 2007, the automaker announced a $730m spend on the Pentastar engine programme, which began production at the new Trenton, Michigan, engine plant in March 2010.

The World Engine is also built in Dundee. GEMA make the two- and 2.4-litre I4 unit for the Chrysler Sebring and Sebring convertible; Jeep Compass and Patriot; and Dodge Avenger, Caliber and Journey.

The 62TE transmission is used in the Sebring line and Town & Country minivan plus the Dodge Avenger, Journey and Grand Caravan.