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Chrysler to invest $843 million in Kokomo plants

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Hard-hit Kokomo got a big boost from Chrysler on Tuesday when the automaker announced it plans to pump another $843 million into its casting and transmission factories.

The investment was announced ahead of a visit to the Kokomo transmission plant Tuesday by President Barack Obama and Vice President Joe Biden, who planned to discuss the auto industry bailout.

Chrysler said in a statement that the money would pay for equipment to modernize both factories. It would extend the life of the plants and help retain nearly 2,250 jobs, equipping it to build a new front-wheel-drive transmission for unspecified future vehicles, the company said.

The automaker already has announced that the transmission plant will built a new 8-speed automatic transmission in Kokomo in 2013 with a German parts supplier.

Chrysler said the new investment would raise the company's commitment to the Kokomo plants to $1.1 billion, pushing its total U.S. factory investment to nearly $3 billion since it emerged from government-funded bankruptcy protection in 2009.

The Auburn Hills, Mich.-based automaker, now run by Italy's Fiat Group SpA, was near death before getting a $12.1 billion bailout from U.S. taxpayers to make it through bankruptcy. In exchange, the government got a 10-percent stake in the company, which still owes taxpayers roughly $7 billion in loan payments.

For Obama, the trip to Kokomo is a chance not only to respond to bailout critics, but also to promote the $800 billion economic stimulus he pushed through Congress in the early days of his presidency.

Declared one of "America's fastest-dying towns" by Forbes magazine in 2008, Kokomo hit bottom in June 2009 when unemployment in that midsize city in north-central Indiana reached 20.4 percent. Unemployment is still higher than the national average, but it dropped by nearly 8 percentage points to 12.7 percent in September.

The Chrysler bailout helped keep the company's Kokomo transmission plant open. The Kokomo area also benefited from about $400 million in stimulus money, including an $89 million Energy Department grant to help Delphi Automotive Systems develop electronic components for hybrid vehicles.

The Kokomo investment would be Chrysler's largest in a single year. It's contingent on the city approving tax breaks.

Chrysler Group has said it will partner with German-based ZF Group on the next generation front-wheel drive transmission, which is providing design and technology.

"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 of Chrysler Group LLC. "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."

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  • chrappy?
    I do think you might be a Getrag employee,
    Chrappy?
  • Getrag Transmission!??!!??
    How about paying back all the contractors you screwed over when you backed out of the Getrag Transmission Plant in Tipton?? before investing any more money!!!! What is wrong with Chrysler?? Chrappy chars by a chrappy chompany.

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  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

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