Chrysler plans to invest up to $374 million and potentially hire 1,250 workers in central Indiana to make more eight-speed and nine-speed transmissions for cars and trucks.
About $162 million would be used for purchase of a former Getrag Transmission factory and equipment in Tipton, Ind., and add 850 jobs there, said Chrysler spokeswoman Jodi Tinson.
In nearby Kokomo, Ind., where Chrysler already operates three transmission plants and a casting plant, the company is proposing to spend $212 million and add 400 jobs.
Chrysler needs additional capacity for its new transmissions, which the company plans to introduce on almost all of its cars and trucks over the next two years.
The transmissions, developed in a failed joint venture with German supplier Getrag, typically improve the fuel efficiency of Chrysler's vehicles by 10% from the model they replace and are an important tool for meeting more stringent government fuel economy standards by 2016.
The automaker's decision to add to its operations in Indiana has nothing to do with the state's decision to adopt right-to-work legislation in February, Tinson said.
"I think it has more to do with the fact that Kokomo already is the center of our transmission manufacturing and has proven itself to be a very integral part of our manufacturing portfolio," Tinson said.
Chrysler's former owner, Cerberus Capital Management, abandoned the former Getrag Transmission factory about five years ago.
Chrysler considered buying the plant before Colorado-based Abound Solar announced plans to locate there in 2010. Abound declared bankruptcy earlier this year.
The plant is now owned by the real estate investment firm of W.W. Reynolds of Boulder, Colo., and has a list price of $39.5 million.
On Monday, Chrysler received approval from the Tipton County board of commissioners for a $48.6-million tax abatement for equipment at the plant.
Separately, Chrysler submitted a request to the Kokomo City Council that was to be considered for a tax abatement late Monday.
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