UPDATE: Chrysler restructuring might lure plant to Indiana

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Automaker DaimlerChrysler AG’s discussions about developing a dual-clutch transmission with supplier Getrag has resulted in the German companies signing a non-binding agreement, DaimlerChrysler said this morning.

The Getrag project is part of a planned $3-billion investment in new engines, transmissions and drive trains to make vehicles more fuel-efficient, DaimlerChrysler said. Chrysler has relied on trucks and sport-utility vehicles to fuel profits—a failed strategy after gas prices spikes in the past couple of years.

Several Indiana communities—including Kokomo, Frankfort and Tipton and Miami counties—are vying to land any plant that might result, the Kokomo Tribune has reported. The $560 million facility might employ 1,200.

However, that was about the only good news in today’s statement.

DaimlerChrysler said it will lay off 2,000 white-collar workers and 11,000 blue-collar workers in an attempt to restore profits by 2008.

An assembly plant in Newark, N.J., will close as a result of the downsizing, but there was no mention of three transmission plants the company operates in Kokomo. The plants employ about 7,000, according to Chrysler’s Web site.

Edgy Chrysler workers for days have anticipated today’s announcement as the “Valentine’s Day Massacre” for its drastic job cuts.

The company also said it is looking into strategic options, but stopped short of saying the Chrysler division would be sold.

Chrysler closed an engine block foundry on the Indianapolis southwest side in fall 2005, costing 900 workers their jobs. In 2003, the automaker sold its New Castle parts plant to Metaldyne Corp. of Plymouth, Mich.

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