By SCOTT SMITH, Kokomo Tribune staff writer
scott.smith@kokomotribune.com
Monday, state officials publicly attempted to tie federal bailout funding to unpaid bills on the abandoned Getrag plant.
Wednesday, Chrysler LLC officials responded, indicating struggling contractors should pursue Getrag Transmission Manufacturing LLC for the unpaid bills.
"It is Getrag that abandoned the construction of the transmission plant, not Chrysler," Chrysler spokesman David Elshoff said in a written statement. "In addition, the various contractors, subcontractors and suppliers were all employed directly or indirectly by Getrag, not Chrysler.
"Nonetheless, we are very sympathetic to the economic stress imposed upon those parties as a result of the apparent failure to perform by Getrag."
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.
Dozens of contractors claim they were not reimbursed for work performed in the two months prior to Getrag's November bankruptcy filing.
Monday, Indiana Secretary of Commerce Mitch Roob attributed the "decision to abandon the construction and operation of the new transmission manufacturing plant" to Chrysler.
Elshoff disagreed, saying Chrysler was sympathetic to the stress placed on the contractors "as a result of the apparent failure to perform by Getrag."
"Regrettably, the failure of Getrag to perform became the subject of a lawsuit which we initiated last fall," Elshoff said. "Subsequently, Getrag sought protection under the United States Bankruptcy Code and currently, the claims of the various contractors, subcontractors and suppliers, as well as those of Chrysler, are pending in such bankruptcy action."
Attorneys representing the IEDC, Tipton County, and the unpaid contractors held a conference call with Chrysler Tuesday, in an attempt to secure a promise of payment from Chrysler.
Tipton County Commissioner Jane Harper and Jim Miller, president of BMD Contractors, Kokomo, both said Chrysler declined the state's request to return Tipton County's investment and the money owed to the contractors.
"They said 'no' to every request we made," Harper said Tuesday.
Roob was unavailable for further comment Tuesday and Wednesday.
Tipton County officials hope Getrag will continue to pay property taxes on the 900,000 square foot plant, and the 147-acre property it sits on.
If Getrag fails to pay those taxes - including an estimated $1 million due in 2010 - the county taxpayers will have to pay back $3.1 million in bonds issued to provide infrastructure for the project.
Numerous contractors - including several with local ties - are now in dire financial straits due to the Getrag bankruptcy and the slow economy.
Tipton County Commissioner Mike Cline said Wednesday he mainly faults Chrysler for what happened to the plant, saying he doesn't believe Getrag would have become involved in the joint venture if Chrysler hadn't initiated it.
"I just think Chrysler's passing the buck. I just have my own opinion, but I feel like Chrysler decided they didn't need those transmissions," Cline said.
At the same time, Cline said Getrag officials could be blamed for failing to obtain the necessary security to get financing.
"It may have been Getrag's fault to get a full-fledged agreement out of Chrysler," Cline said.
"As a farmer, I can't borrow if I can't prove I'm going to be able to sell my grain to pay off the loan," he said. "It's kind of like, which came first, the chicken or the egg?"
In his statement, Elshoff did not directly address Roob's suggestion that Chrysler "has a responsibility" to use a portion of any further federal bailout funding to pay off the Getrag debts.
"We appreciate the county's comments and acknowledge the critical importance of the continuing success of Chrysler LLC in the State of Indiana," Elshoff said. "We are committed to re-emerging stronger and continuing to employ many Hoosiers."