Chrysler considers production boost at Indiana plants

Could add 400 jobs at existing factories, 850 workers at new nearby plant

12/18/2012

KOKOMO, Ind.  — The Chrysler Group is preparing for a large expansion of its central Indiana operations that a researcher said would likely boost other companies in the area.

Chrysler officials have outlined plans to potentially add 400 jobs at three existing transmissions factories in Kokomo while also starting up a new plant at nearby Tipton with perhaps 850 workers.

The Kokomo City Council voted Monday night to approve property tax breaks requested by Chrysler for $212 million in new equipment for its factories in the city, the Kokomo Tribune reported. Tipton County officials also endorsed a similar request on Chrysler's $162 million plans to complete a sprawling, never-occupied factory along U.S. 31.

Brian Harlow, Chrysler's vice president in charge of powertrain manufacturing, told that Tipton County commissioners that the company's increased sales means there's a need for more transmission production.

“Our operations in Kokomo have outstripped our capacity,” Harlow said. “We knew we had to invest in powertrain operations.”

The company hasn't given specifics on when it will start equipping the factories or hiring additional workers, saying final decisions haven't been made.

Chrysler's request to Kokomo officials said the investment will help retain 3,400 jobs in the city.

Kokomo Mayor Greg Goodnight called Chrysler “a great success story for America.”

“I think it says a lot about Chrysler's turnaround, and their profitability,” Goodnight said.

Harlow said sales by Chrysler have grown from about 1 million in 2009 — the year it emerged from bankruptcy — to a projected 2.4 million for 2012.

The size of Chrysler's expansion plans is similar to new auto plants opened in Indiana in recent years by Honda in Greensburg and Toyota in Princeton.

Michael Hicks, director of Ball State University's Bureau of Business Research, said the hiring by Chrysler could lead to hundreds of additional jobs at suppliers.

“A plant like that ... needs chemicals and machinery ... raw steel and aluminum,” Hicks told The Indianapolis Star. “There are going to be a significant number of suppliers” that will benefit.

The Tipton factory site, about 35 miles north of Indianapolis, originally had been planned as a 1,400-worker factory that would make transmissions for Chrysler until German auto parts maker Getrag stopped construction in 2008.

Colorado-based solar panel maker Abound Solar received a $400 million federal loan guarantee in 2010 to launch operations in the Tipton facility. But that plan failed when the company filed for bankruptcy liquidation in June.

Harlow said Chrysler was in negotiation with the company that owns the Tipton facility. He said the automaker doesn't plan to lease the plant.

“This is a long-term commitment,” he said.