$68 million investment in Kokomo Chrysler plant will allow for retention of more than 300 jobs

scott.smith@kokomotribune.com

Kokomo city officials announced Thursday Chrysler LLC will make a $68 million investment in two Kokomo facilities, bringing in equipment to help manufacture the new Phoenix engine.

The Phoenix - an all-new family of V-6 engines - will join the Chrysler Group lineup in 2010.

The company has already broken ground on new plants in Trenton, Mich., Kenosha, Wis., and Mexico - all of which will produce this family of engines.

The Kokomo facilities will make die cast, aluminum engine blocks as part of a $3 billion "powertrain offensive." The goal is a group of next-generation, fuel-efficient powertrains.

The Phoenix will feature cylinder deactivation. The engine is designed to operate efficiently on three cylinders when less power is needed and on six when more power is needed.

Company officials expect the new engine will increase fuel efficiency by 6 percent to 8 percent.

Chrysler will add manufacturing equipment and special tooling to adapt facilities at the Kokomo Casting Plant, to cast parts for the Phoenix engine as well as two parts for the Wet Dual Clutch Transmission.

The new transmission will be manufactured at the Getrag Corporate Group transmission plant nearing completion in Tipton County. The Chrysler investment will also allow Phoenix engine blocks to be manufactured in Kokomo.

"Chrysler has been a part of this community for 70 years," said Kokomo Mayor Greg Goodnight. "This investment is just another sign that they plan to be a part of this community for decades more."

According to paperwork filed with the city, Chrysler expects the $68 million investment to retain more than 300 jobs at the Kokomo Casting Plant and the Kokomo Transmission Plant.

Currently, 3,944 are employed at the two plants. The company said in its filing it does not expect to add any jobs through the investment.

"Chrysler is showing its commitment to Kokomo with a multi-million dollar investment," said Kokomo Director of Development Debra Cook. "This commitment is the result of a highly skilled work force and a strong and lasting partnership between the company and the citizens of Kokomo."

Monday, the Kokomo Common Council will set a public hearing date for an abatement on the $68 million investment.

City officials said that "even with the abatement, the investment would add an estimated $2.76 million to the local tax rolls over the next 10 years."

Chrysler officials and United Auto Workers Local 685 officials could not be reached for comment Thursday.

Delphi abatement also Monday

Also Monday, council members are expected to hold a public hearing on a separate abatement for Delphi Corp.

Delphi Electronics & Safety executives are hoping council approves an abatement which could bring an $160 million investment to Kokomo.

Company officials said last week Kokomo is one of several sites being considered for the investment, which would include new electronics manufacturing equipment.

Delphi's abatement request also mentions the company intends to replace $100 million worth of equipment currently in place at the Kokomo operations.

Spokesmen last week could not give details on what equipment might be leaving - and what equipment might be taking its place.

The abatement request states the net assessed value of equipment at the Kokomo operations would increase by $60 million if the investment is made. The company would have four years to bring in the new equipment if the abatement is approved, and the company would only receive a tax break on the net increase in assessed value.

The company, which declared bankruptcy in 2005 and has yet to emerge, is facing a potential cash crunch as payments on pension obligations come due later this year. Delphi also owes the city of Kokomo about $8 million in unpaid property taxes.