Chrysler and United Auto Workers officials were on hand to thank city leaders Monday as the Kokomo Common Council gave preliminary approval to a $43 million property tax abatement.
“I think this will be truly vital and will create jobs,” UAW Region 3 representative Jeff Shrock said. “I think our employee levels will continue to grow.”
Chrysler Group LLC is promising to add a total of 399 jobs between the Kokomo Transmission Plant and the Kokomo Casting Plant, in return for an abatement on $43 million worth of new machinery.
Of the 399 employees, 379 have all ready been recalled from lay-off status, said Rich Boruff, president of United Auto Workers Local 685. The remaining 20 employees will be supervisory positions.
Boruff said the company, which employs about 3,000 in Kokomo, pays about $200 million in wages and salaries to local workers each year.
“I appreciate your continued support,” Boruff told the council. “Like the last time I was here, I told you, ‘We’re not going anywhere.’”
News of the company’s planned expansion came the day after Chrysler CEO Sergio Marchionne presented a five-year plan for Fiat SpA, the Turin, Italy-based firm that operates Chrysler.
As part of that plan, Chrysler will produce a third of the products for both companies; Jeep will become a global brand and Fiat’s Alfa Romeo will re-enter the American market as a full-line brand and be sold with Chrysler products, Marchionne announced.
Marchionne also said Chrysler’s North American plants are scheduled to build 400,000 vehicles for the company’s European brands.
The council must pass the resolution for the Chrysler abatement a second time at its May 10 meeting. Council will hold a public hearing on the abatement just prior to that meeting, at 7 p.m. in council chambers at City Hall. The abatement will pass if the council passes a third reading at the May 24 meeting.
Boruff said the plan is to use the investment at KTP to increase production of the 62TE six-speed transmission that is currently used in the Sebring, Avenger, Journey and minivans.
When the 62TE was launched at KTP, the plant was scheduled to produce 440,000 transmissions annually. With the investment, KTP can increase production to 531,000.
Like the proposed Delphi abatement, which council passed on second hearing Monday, the Chrysler abatement is for five years, which roughly matches the depreciation schedule on the machinery.
April 12, the city council approved a $59 million abatement on new equipment Delphi Corp. will use to create new manufacturing capacity for electric vehicle components.
That project is expected to create 118 new jobs and retain 72 existing jobs, with full production volume expected by 2013 or 2014.