Chrysler Announces $1.186 Billion Indiana Plant Investment

The Chrysler Group, LLC, has announced that it is investing an additional $843 million in its Kokoma, Indiana, facility, building on an earlier $343 million investment decision for this same plant. The automaker’s announcement preceded a visit to the plant by President Barack H. Obama and Vice-President Joseph R. Biden, Jr., who were on hand to tour the facility and speak with Chrysler workers.

Indiana Investment

The Chrysler investment will modernize the company’s transmission and casting facilities to produce all-new front-wheel-drive transmissions for upcoming Chrysler products. That investment would cover the cost of installing equipment and specialized tooling to overhaul its Indiana transmission plants and a casting plant. Chrysler says that the investment will extend the life of both manufacturing facilities, retaining approximately 2,250 jobs.

Chrysler announced earlier this year that it was partnering with Friedrichshafen, Germany-based ZF Group, to produce eight-speed automatic transmissions for a wide variety of vehicles. Typically found in a limited number of luxury cars, Chrysler wants to raise the current industry standard of five- or six-speed automatic transmissions to eight in a bid to increase fuel mileage and give itself an edge over the competition.

Chrysler Profitability

Chrysler’s new found resurgence follows its 2009 bankruptcy restructuring and subsequent management by the Fiat Group headed by Sergio Marchionne. This year, the automaker has seen its sales rise by 16.5 percent through October 2010 and its profits return. Chrysler claims a $565 million operating profit through the third quarter and is on track to finish in the black for 2010.

The announcement brings Chrysler’s planned investment in US facilities to more than $3 billion since June 2009. Other facilities slated for updates include its Belvidere (Ill.) Assembly plant; Sterling Heights (Mich.) Assembly plant; and its GEMA (Dundee, Mich.) facility. Additional worker shifts at its Jefferson North (Detroit) Assembly Plant and Sterling Heights (Mich.) Assembly Plant have also been announced.

Chrysler has been using these announcements to stress that jobs have been saved or added at various facilities across the United States. This follows years of retrenchment by General Motors, the Ford Motor Company, and Chrysler, where hundreds of thousands of auto industry jobs have been lost through production cutbacks or sending production overseas.

Employee Recognition

Obama and Biden recognized the service and experiences of two Chrysler employees while speaking with workers. Sharron Ybarra, was hired in September 2010 following losing her low-paying job at a local paper mill. James Faurote, has been a Chrysler employee since 1998, but was laid off multiple times over the next decade. However, it was the bankruptcy restructuring of Chrysler which has kept Faurote on the job for more than a year and allowed the automaker to hire Ybarra, points the Obama administration has noted when it defends the federal bail out of Chrysler.

Source: Chrysler Group, LLC

Further Reading

The Wall Street Journal: Obama In Kokomo: I Told You So

USA Today: Fewer People Hate The Auto Bailout, But Most Still Don’t Like It