1,500 workers idled at two Kokomo transmission plants

As officials in Washington continue to mull a possible multi-billion bailout for the Big Three automakers, employees at two Kokomo transmission plants are staying home for the week.

About 1,500 employees at Indiana Transmission Plant I & II are on temporary layoff this week due to decreased demand for transmissions, Chrysler LLC spokesman Mary Beth Halprin confirmed Tuesday.

"It's all based on market demand," Halprin said.

Rich Boruff, vice president of UAW Local 685, said Monday workers from Kokomo's four Chrysler plants have been placed on furlough at various times throughout the year.

"It's no different than has happened in the past," Boruff said of the ITP I & II shutdown. "Sales over the last year have declined."

Boruff said the second assembly shift at the Kokomo Transmission Plant was also off this week, estimating the KTP is running at less than half-capacity.

Halprin said the company is expecting to recall the ITP I & II workers Monday. She declined comment on any possible future temporary layoffs at Kokomo's Chrysler plants, saying the company doesn't publicly announce its planned production schedules.

Kokomo Chrysler workers will be off between Christmas Day and the beginning of the new year, she added. Plant shutdowns are not unusual during the holidays.

Halprin also had no comment on Monday's bankruptcy filing by former business partner Getrag Transmission Manufacturing LLC.

"We won't be making any proactive statement on Getrag," Halprin said.

Chrysler filed suit against Getrag Oct. 7, accusing the firm of breach of contract and misrepresenting its ability to obtain financing for the stalled Tipton County transmission plant.

Getrag Corporate Group officials then filed a countersuit against Chrysler, seeking $430 million already spent on the Tipton facility.

Left unanswered are questions as to how the Getrag bankruptcy might affect a planned $68 million investment in Chrysler's Kokomo operations.

That planned investment in manufacturing equipment and special tooling, which was expected to retain more than 300 union jobs, was to be made in conjunction with the rollout of new transmissions at Getrag.

The Kokomo Common Council approved the abatement last month.

In filing for the abatement, Chrysler officials said they planned to add the equipment to adapt a transmission "bell" - currently produced at ITP II - for the Phoenix engine project.

Plans called for the Phoenix, Chrysler's next-generation V-6 engine, to be paired with Getrag-produced wet dual-clutch transmissions. Chrysler officials hoped the pairing would increase fuel efficiency and performance in future Chrysler products.

The abatement was also to cover machinery added to cast two additional parts for Getrag's Program, and to manufacture engine blocks.

Chrysler officials had no immediate comment Tuesday on how much, if any, of the planned investment would be made, given current circumstances.

Also in question is a planned partnership between Chrysler and Canadian firm Linamar Corp.

In June, Halprin and UAW 685 officials confirmed the existence of a memorandum of understanding with Linamar, saying it could lead to the lease of manufacturing capacity at the Kokomo Transmission Plant.

At the time, UAW 685 president Craig Smith said the memorandum could lead to the creation of 200 jobs in Kokomo.

Under the memorandum, Linamar was expected use local Chrysler workers to create parts for Getrag's transmissions.

A separate Linamar project was also being discussed, in which parts for Chrysler's new V-6 Phoenix engine would be cast at Chrysler's Kokomo Casting Plant.

In August, a top Chrysler official indicated adding the Phoenix engine jobs wouldn't be feasible without Getrag.

"It's helped us bring in the Phoenix engine block [at the Casting Plant]. That would have been hard to justify if not for Getrag," Chrysler powertrains operations manager Brian Harlow said at a local Rotary luncheon.

Tuesday, Halprin said "talks are ongoing" with Linamar.

Getrag officials had originally hoped the $530 million Tipton plant would be operational in late 2009.