Kokomo — Chrysler Group LLC hasn’t yet fully committed to bringing a new transmission line to Kokomo, but that was hardly apparent from the enthusiasm generated Monday by United Auto Workers leadership.
Chrysler officials unveiled plans Monday to spend up to $300 million retooling the Indiana Transmission Plant 1 and the Kokomo Casting Plant for the company’s “next generation” transmission.
According to UAW officials, Chrysler plans to build a fuel-efficient, 8-speed transmission which could be marketed to other auto manufacturers, possibly Audi and BMW.
Chrysler officials, however, say they’re planning a major announcement in about two weeks.
Whether that transmission is built in Kokomo, however, could hinge on the Kokomo Common Council offering a more-generous-than-usual tax abatement on the company’s proposed investment.
Monday, Brian Glowiak, head of Chrysler’s government affairs office, told council members the company will seek a 10-year abatement on the manufacturing equipment and special tooling needed to produce the new transmission.
“It’s no secret that our industry is very competitive; cars are produced and sold throughout the global marketplace, and this investment can be made anywhere throughout the global marketplace,” Glowiak said.
In the past, the city of Kokomo has offered five-year abatements on personal property, such as machinery, due to the usual rate of depreciation.
Last month, Chrysler, in requesting a separate, $43 million abatement on new machinery to be added to the KCP and to the Kokomo Transmission Plant, asked for a five-year abatement.
Brian Harlow, Chrysler’s vice president of powertrain development, said Chrysler’s proposal is based on the long-standing partnership between the city and the company.
“This has been our place for transmission building, and there’s a lot of experience here. The cooperation of the city and county government has been a big aspect here,” Harlow said. “We want to work together to get this done.”
There seems to be no obstacles to the passage of the proposed abatement on $270 million worth of machinery; Kokomo Mayor Greg Goodnight is backing the proposal, as is UAW leadership.
The measure passed on first reading 8-0 at Monday’s city council meeting. It must pass on two more readings to become final. A public meeting on the proposed abatement will be held at 7 p.m. May 24 in council chambers, City Hall, 100 S. Union St.
UAW Local 685 president Rich Boruff and UAW Region 3 director Mo Davidson both spoke in favor of the investment Monday.
“I think the council has the opportunity to make history tonight,” Davidson said. “And Fiat has a trust to invest with Chrysler here in Kokomo.
“Let Fiat see what we can do with Chrysler Corp., and I think Kokomo will stay the transmission capital,” he added.
Boruff was effusive in his praise of the project, saying his members could have the chance to “build one of the best transmissions ever engineered.”
“I tell you, there couldn’t be a prouder man to stand before the council tonight,” Boruff said. “We’re here to save jobs. We’ve been through some tough times, and we’ve all stayed together.”
Both Boruff and Davidson said Fiat and Chrysler management are considering Kokomo’s track record for manufacturing efficiency, capped off in 2008 with two key Harbour Report manufacturing awards.
But the company is also still emerging from bankruptcy and the near-fatal downturn in the economy.
Davidson said even with the length of the proposed abatement, the investment will more than pay off for Kokomo.
Company officials estimate the investment will retain 1,184 jobs at the two plants.