State officials put pressure on Chrysler for failed Tipton plant project

State officials are publicly pushing Chrysler LLC, saying the automaker "has a responsibility" to use any further bailout funding to pay contractors and reimburse local taxpayers for the failed Getrag transmission plant project.

Indiana Secretary of Commerce Mitch Roob sent an open letter to media outlets Monday, saying Chrysler's "decision to abandon the construction and operation of the [plant] has ... produced a devastating blow to the local contractors hired to construct the facility."

Mechanics liens totaling more than $100 million have been filed in Tipton County against Chrysler and Getrag Transmission Manufacturing LLC, and local elected officials claim several businesses are on the verge of bankruptcy due in part to the Getrag situation.

"There are some companies that are going to go broke," Howard County Commissioner Dave Trine said Tuesday. "It's not a matter of 'if' - they're going to go broke."

Getrag filed for bankruptcy on the $530 million project in November, after Chrysler canceled agreements to purchase transmissions built at the plant.

The 900,000-square-foot facility is 85 percent completed and was built with the help of $3.2 million from the state and about $4.5 million from Tipton County.

Officials with the Indiana Economic Development Corp. would not comment further than Roob's open letter Tuesday.

But Tipton County Commissioner Jane Harper said Chrysler officials Tuesday rejected Roob's request that the company "return all local incentives ... and properly pay the vendors."

According to Harper and Jim Miller, president of BMD Contractors Inc., Kokomo, a Chrysler executive declined to fulfill the requests during a Tuesday conference call with the IEDC and an attorney representing the county.

"They said 'no' to every request we made," Harper said.

Tipton County taxpayers are ultimately on the hook for the entire $4.5 million in local incentives for the project, although local officials are still hopeful $3.1 million of that will be repaid through future property taxes.

State and local officials are actively trying to market the facility, but in the meantime, contractors like BMD are pressing for payment at both the state and federal level.

Miller said he had 100 men working 60-hour weeks last fall, in order to meet a Nov. 1 deadline for heating the building.

Like most of the other contractors still owed money, Miller said he believes Chrysler and Getrag both knew the project was in doubt sometime in early summer, but didn't disclose the information.

Harper said she doesn't consider it a coincidence that Chrysler canceled its contract with Getrag shortly after receiving $11 million in municipal bonds for the project.

Like the $3.1 million bonded by Tipton County, the $11 million in bonds held by Chrysler and Getrag were to be repaid through a special property tax increment financing district around the new plant.

Tipton County officials said Chrysler and Getrag shouldn't expect those bonds to be repaid and are asking the companies to return the bonds.

Harper said Chrysler officials finally refused that request Tuesday, after declining repeated requests to discuss the issues.

IEDC spokeswoman Blair West said the state originally set a Feb. 20 deadline for Chrysler; that deadline was then extended to Monday.

According to Harper, Chrysler officials asked for a postponement of a planned conference call Friday, and again begged off another scheduled call Monday. Roob sent his letter to media outlets Monday afternoon.

"While opinions on the proposed bailout of Chrysler may differ, all Hoosiers can agree that Chrysler has a responsibility to use a portion of the additional taxpayer assistance it has requested to immediately satisfy [its] obligations," Roob wrote.

Chrysler officials did not return calls for comment Tuesday.

While Chrysler officials blamed Getrag last year for the dissolution of the planned partnership, BMD's Miller said he believes Chrysler is mainly to blame for scuttling the planned joint venture.

Chrysler officials claimed Getrag violated a contractual obligation to obtain financing for the plant.

Miller said officials are focusing mainly on Chrysler, however, because the company is seeking bailout money.

He said contractors think there's a better possibility of being paid quickly through stipulations attached to any further federal assistance, rather than waiting on the bankruptcy court.

For now, at least, Getrag continues to pay for the electricity to heat the plant, and Harper said she "doesn't have any indication [Getrag officials] won't be faithful to their property tax liability."

That liability, however, is expected to exceed $1 million on the unabated, 147-acre property next year. Whether Tipton County will receive that money is an open question.

Trine said he simply wants something done for the contractors caught in the middle of the Chrysler/Getrag fight.

"The main thing with any more [bailout] funding is to get our people paid first," Trine said. "They've done absolutely nothing wrong."