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Chrysler Confirms $843-Million Investment at Kokomo

Nov. 24, 2010
Indiana casting, transmission plants will produce front-wheel drive transmissions

Chrysler Group LLC has indicated it is eyeing an $843-million invest program at its plants in Kokomo, Ind., to produce a new front-wheel drive automatic transmission. The investment figure would be in addition to capital programs announced earlier this year for the Kokomo Casting Plant and Indiana Transmission Plants in that city, bringing the total value of the investments to an estimated $1.1 billion.

The automaker has not itemized the investment project, except to indicate it will cover “the installation of equipment and special tooling to modernize 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.”

"For years, Kokomo has been at the center of our powertrain strategy and the potential of an additional investment reaffirms that position," stated Chrysler Group CEO Sergio Marchionne. "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 in marketplace.”

The new transmission program is a joint development with ZF Group, Friedrichshafen, Germany, which is providing its designs and technology for an eight-speed automatic transmission that Chrysler will introduce in 2013, most likely in larger models like Chrysler 300, Dodge Charger, Jeep Grand Cherokee, and Ram pickups.

ZF Group is a well-known designer and manufacturer of automotive systems and components, especially suspension and drivetrain systems. In 2007 Chrysler agreed to lease the new plant it developed in Marysville, Mich., to replace its Detroit Axle operation. ZF also operates ZF Commercial Suspension Systems & Components LLC, in Lancaster, S.C., and it recently announced a new, $350-million plant to produce automatic transmissions in that state.

When Chrysler announced its $300-million investment in the Kokomo Casting plant last spring it indicated the new eight-speed transmission will help to a reduce its corporate average fuel economy by over 25% by 2014.

Kokomo Castings is an aluminum diecasting operation that produces engine and transmission parts. In addition to the new investment toward the new transmission program, in May Chrysler announced a $43-million investment for Kokomo Castings in preparation for producing four-cylinder blocks for the World Engine, and to improve processes for producing the 62TE transmission.

There are two Indiana Transmission Plants in Kokomo: one produces a rear-wheel-drive transmission for the Jeep Grand Cherokee, Jeep Liberty, Dodge Dakota and Ram Trucks and a transmission for heavy-duty trucks; the second manufactures a five-speed transmission for the Chrysler 300, Jeep Grand Cherokee, Dodge Nitro, and Dodge Charger.