Editor's note: An earlier version of this story included an incorrect value for the 10-year tax abatement approved by Tipton County officials Monday.
Chrysler Group LLC plans to spend $162 million to open a transmission plant in Tipton that will employ up to 850 people, the automaker disclosed Monday morning.
Tipton officials on Monday approved a 10-year tax abatement worth $2.5 million to help the company launch production in an existing, nearly 800,000-square-foot plant at U.S. 31 and State Road 28, about 25 miles north of Carmel.
The plant, which is about a half-hour south of the company’s transmission plants in Kokomo, never has been occupied. Chrysler partnered with Getrag Transmission of Germany in 2007 to build the plant, which had been expected to employ 1,200 and make dual-clutch transmissions. But that partnership unraveled the next year, halting construction of the plant.
Chrysler now says it will use the plant to make a new line of nine-speed transmissions. The company said it hopes to begin installing equipment at the facility in June 2013, which would allow it to launch operations by the end of 2014.
The automaker has been growing rapidly in central Indiana in recent years, adding about 1,000 jobs in Kokomo since emerging from bankruptcy reorganization in 2009.
The Tipton project isn't the only expansion Chrysler is proposing for north-central Indiana. Chrysler spokeswoman Jodi Tinson confirmed Friday that the automaker has asked Kokomo to approve additional tax abatements for another investment, but she wouldn't discuss details.
Kokomo officials are expected to vote on that request Monday night.
Brian Harlow, the vice president of Chrysler's power train division, said Monday that booming demand coupled with the government's looming fuel-efficiency mandates have pushed the company's Kokomo factories toward capacity.
The company needs more lines to produce the nine-speed transmissions designed by German firm ZF Group.
Harlow said the Kokomo expansion plans are "tied into" the Tipton County project, but he would not release further information.
This will be Tipton County's third attempt to fill the massive building and Chrysler's second attempt to inhabit it.
After Getrag abandoned plans for the plant, Colorado-based solar panel maker Abound Solar received a $400 million federal loan guarantee in 2010 to launch operations in the facility. But the company filed for bankruptcy liquidation earlier this year, scuttling the plan.
The Associated Press contributed to this story.