By JOHN DEMPSEY, Kokomo Tribune business writer
john.dempsey@kokomotribune
With the notice that Chrysler has bowed out of a partnership to build a transmission plant in Tipton County, Getrag officials are looking for other options.
"Now, what we're doing is scratching our heads and trying to come up with Plan B with how best to move forward," Getrag Chief Financial Officer James Sheehan told the Kokomo Tribune Wednesday afternoon.
Chrysler LLC's decision hit Getrag "out of the blue."
"We're very, very disappointed in how this developed, not just for us, but for our suppliers and the Tipton community," he said.
"We have a great team down there and had some great hopes. They were dashed on Friday when we received the termination notice. It's something we cannot fathom."
Whether Plan B means Getrag Corporate Group would find a partner or if it would possibly leave the area and sell the 147-acre site, Sheehan couldn't say.
"It's too early," he said. "We only received notice Friday."
The problems in the automotive industry, however, may make finding another customer for the transmissions difficult.
"We will leave no stone unturned," Sheehan said, "but that process will be a difficult one.
If a customer for the transmissions is found and the plant goes forward, Getrag would look to Tipton and the surrounding area for employees.
"We've always been very happy with the Tipton community and the first place we would look for employees would be Tipton," he said. "We've had great experience with greenfield [new] sites.
"We recently built a facility in Slovakia, where we started from scratch and with a local work force. Should we proceed, that would our number one option [for employees]."
Getrag notified its suppliers to suspend work on issues related to the Tipton plant, including work at the site itself.
"We're currently going through the process of securing the site. Evaluating our options for Plan B for the site may take a period of time and we're having to secure the site until that plan B presents itself," Sheehan said.
The delivery of equipment and machinery was about to begin.
"We had the machinery ordered. It was only just beginning to arrive and installation had not commenced," the Getrag official said. "We were on track to open on time and were ready to support Chrysler and the Phoenix engine."
Both Sheehan and Chrysler spokesman Ed Saenz confirmed that some employees, both hourly and salaried, had already traveled to Germany for training with Getrag.
Chrysler also has to determine what transmissions it can mate with the upcoming Phoenix engine. The dual-clutch wet transmission Getrag was going to supply was part of a Chrysler powertrain initiative to increase fuel economy with engines, transmissions and axles.
The engine block for the V-6 Phoenix, which is to begin production in late 2009, will be produced at Kokomo Casting Plant.
"We're going to be evaluating our options. I think it's premature to say what tack Chrysler will take on future product or transmission applications," Chrysler spokesman Dave Elshoff said.
The Getrag situation will not affect Phoenix at the casting plant, he said.
Sheehan believes the technology of the dual-clutch wet transmission is one other automakers would consider putting in their vehicles.
"The product in Tipton was going to be a front-wheel version and for a large sedan. This technology is certainly something for the future," he said. "This technology can achieve fuel economy improvements up to 10 to 15 percent over the conventional torque converter - the automatic transmissions that they have in the U.S."