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US: Chrysler to spend another $843m on transmissions

By Graeme Roberts | 24 November 2010

Vice president Joe Biden (left), plant manufacturing manager Dee Dee Simpson (left centre), president Barack Obama (right centre), and UAW committeeman Matt Jarvis (right), discuss transmission parts in Kokomo

Vice president Joe Biden (left), plant manufacturing manager Dee Dee Simpson (left centre), president Barack Obama (right centre), and UAW committeeman Matt Jarvis (right), discuss transmission parts in Kokomo

Chrysler Group last night confirmed it was looking to invest $843m at its existing transmission manufacturing facilities in Kokomo, Indiana, to accommodate production of a new advanced front-wheel drive automatic transmission. With this announcement, the company’s total investment in US facilities would climb to nearly $3bn since June 2009.

The news came as US president Obama and vice president Biden toured the Kokomo facility. 

When combined with previously announced investments totaling $343m in its Kokomo facilities, this potential new investment would make the city the recipient of the largest investment - $1.1bn – in a single year in a single community, pending the city council’s approval of Chrysler Group’s tax abatement application on 13 December. The investment would fund the installation of equipment and special tooling to modernise the Indiana transmission plants and the Kokomo casting plant. The project would extend the life of these manufacturing facilities and help retain nearly 2,250 jobs. 

Chrysler Group will be partnering with Friedrichshafen, Germany-based ZF Group on the next generation front-wheel drive transmission, as it has with the eight-speeder which was the subject of a June announcement of a $300m spend.

”For years, Kokomo has been at the center of our powertrain strategy and the potential of an additional investment reaffirms that position,” said Sergio Marchionne, CEO, Chrysler Group. “When introduced, this new front-wheel drive transmission, along with the previously announced eight-speed transmission we will also produce in Kokomo, will transform our future products and position them as leaders. 

“With the promise of investing more than $1bn into our Kokomo facilities within the last six months, we are demonstrating our commitment to this community and our dedicated workforce,” Marchionne said.

The Indiana plant currently produces the 45 RFE rear-wheel drive transmission for Jeep Grand Cherokee, Liberty, Dodge Dakota and Ram Trucks and 68 RFE for Cummins Diesel, Heavy Duty. Indiana Transmission Plant II produces the W5A580 five-speed transmission for the Chrysler 300, Jeep Grand Cherokee, Dodge Nitro and Charger. Kokomo casting manufactures aluminium parts for automotive components, transmission and transaxle cases.

Earlier this year, Chrysler said it would spend $343m in Kokomo - $43m to increase capacity at the casting and transmission plants, adapt them to support production of the World Engine and improve processes for the 62TE transmission programme; and $300million to accommodate a new highly fuel-efficient eight-speed automatic transmission.

Since June 2009 Chrysler has also announced a $600m investment in its Belvidere (Ill.) Assembly plant; $1bn for its Sterling Heights (Michigan) assembly plant and surrounding stamping facilities as well as its GEMA (Dundee) facility; added a second shift of production – or nearly 1,100 jobs – at its Jefferson North (Detroit) Assembly Plant; said it would add nearly 900 jobs on a second shift at Sterling Heights in the first quarter of 2011; and said it would spend $179m to launch production of the 1.4-litrr, 16-valve Fully Integrated Robotised Engine (FIRE) at Dundee, adding 150 new jobs.