Chrysler, Tipton County dealings on hold over failed transmission plant

ken.delabastide@kokomotribune.com

TIPTON - No communication has taken place between Chrysler and Tipton County officials since March 29 in a dispute over costs incurred by the county at the failed Getrag Transmission plant.

County officials maintain that, according to a commitment letter signed by Chrysler officials in 2007, if the Getrag plant didn't open the American automaker would reimburse the county for its costs.

In a letter sent on March 29, Chrysler LLC made a formal offer to relinquish $5.5 million in bonds to Tipton County, in exchange for the county agreeing to release all claims against the company.

Tipton County officials declined the offer and contend Chrysler owes them an additional $4.5 million spent on the failed transmission plant.

An investigation was started by Indiana Secretary of State Todd Rokita's office last month into possible securities fraud by Chrysler.

Jim Gavin, a spokesman for Rokita's office said that investigation is on-going.

Tipton County Commissioner Jane Harper said Wednesday an investigator from Rokita's office interviewed several county officials on March 27 that were close to the Getrag project.

"Everything is on hold," Harper said. "We have heard nothing from Chrysler since March 29.

"We are hoping that Todd Rokita will file a complaint. That has been the only thing that has gotten Chrysler's attention."

Harper said county officials are hoping Rokita's office has enough evidence to file a complaint.

"We believe the ball is in Rokita's and Chrysler's court right now," she said. "We want Chrysler to honor their commitment."

Harper said Chrysler's March 29 offer fell far short of what was needed.

"Chrysler previously paid for about $14.5 million in infrastructure improvements around the Getrag Transmission Manufacturing project in Tipton, and received bonds in the amount of $5.5 million issued by Tipton County as a way of financing infrastructure improvements," Chrysler said in a statement. "Chrysler has offered to transfer $5.5 million in bonds to Tipton County at no cost as part of Chrysler's good faith efforts to minimize the impact on Tipton County of the commercial dispute with Getrag triggered by Getrag's failure to arrange required financing for the project. This will help Tipton County find other uses for the property in a way that benefits the community.

He added that "Chrysler is committed to supporting its operations in Indiana."

Since the matter is currently in litigation, Chrysler will make no further comment, the statement read.

Harris Bank is holding $3.1 million in bonds issued by Tipton County for infrastructure improvements at the plant site.

Harper said there was enough money in the bond amount to make the 2009 payments.

"In 2010 we have to come up with the payments," she said.

Harper said the assessed value on the plant, which is 85 percent complete, was $106 million on March 1, which means Getrag LLC will owe $1 million in property taxes.

"Those funds would be enough to make the bond payment," she said. "We believe [Getrag] will fight the assessment. An assessment of $20 million is the break-even point for the bond payments."

Harper said even though Getrag Transmission LLC filed for Chapter 11 bankruptcy protection, it is still required to pay property taxes.

"We will know if they will pay the property taxes very soon when the spring payment is due," she said.

Congressman Dan Burton, R-5th District, has asked Treasury Secretary Timothy Geithner to withhold any additional loans to Chrysler until the Tipton County issue is resolved.

Chrysler and Getrag announced plans to construct the $530 million transmission plant in Tipton County that was expected to employ 1,200 people in 2007.

Last year Chrysler filed a lawsuit against Getrag claiming the necessary financing to complete the plant was not obtained.

Getrag Transmission Manufacturing LLC filed for bankruptcy in November 2008 and canceled the Tipton project.