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Chrysler Investing Nearly $400 Mil, Creating 1,250 Indiana Jobs

Factory to add new 9-speed automatic transmission.

by on Feb.28, 2013

Chrysler will add 1,250 jobs in Kokomo to build its new 9-speed automatic transmission.

Chrysler plans to invest nearly $400 million and create 1,250 new jobs at two plants near Kokomo, Indiana.

It’s the latest in a series of investments by the maker that has resulted in the creation of 8,000 more new positions since Chrysler emerged from bankruptcy in 2009. The new project also protects the jobs of another 3,400 jobs in Kokomo, a hub of automotive parts manufacturing.

“Chrysler’s future and the future of North Central Indiana are tied together, and that future has never looked brighter,” said Kokomo Mayor Greg Goodnight, following the announcement by Chrysler CEO Sergio Marchionne.

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In his own comments, Marchionne pointed out that Kokomo is the only place in the world where Chrysler produces transmissions – though it does “outsource” some from suppliers like Germany’s ZF.

In fact, the expansion of the Kokomo operations will allow Chrysler to begin production of a new, advanced 9-speed gearbox developed by ZF.  The Detroit maker will produce some and purchase more from the supplier’s own manufacturing facility in South Carolina.

The 9HP, and an 8-speed also coming out of Kokomo, are critical elements of Chrysler goal to meet upcoming federal fuel economy standards, especially the 54.5 mpg mandate that will take effect in 2025.

The 9-speed automatic will initially be used on the all-new Jeep Cherokee, the replacement for Chrysler’s aging Liberty SUV.  According to Marchionne, the 9HP will then go into other models including the Dodge Dart.

Sales of that sedan have been lower than expected and Marchionne has acknowledged part of the problem was the original powertrain combinations offered for Dart. He hopes that the new gearbox and a bigger engine option should improve the Dodge model’s appeal while maintaining or even approving its mileage.

Chrysler is just one of several manufacturers planning to use the 9HP transmission. Land Rover has confirmed it will announce its own plans during the upcoming Geneva Motor Show.

(Click Here for that story.)

The added gears help ensure the engine is always running in its sweet spot in terms of both performance and fuel efficiency. While specific gains depend on individual applications, ZF CEO Stefan Sommer recently told that the 9-speed can yield up to 13% better mileage than a comparable 6-speed gearbox. And by operating at lower RPMs on the highway, engine noise and vibration can be reduced, as well.

Chrysler currently produces transmissions at three plants in the Kokomo area. But its needs are expanding having seen overall vehicle sales grow from 931,000 in 2009, the year it went through bankruptcy, to 1.65 million in 2012.

The latest announcement brings to $5.2 billion the investments the maker has announced for its U.S. factory network since emerging from Chapter 11. It has added 8,000 jobs since then, as well.

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