Getrag meeting with state, local officials after filing for bankruptcy

By Anthony Schoettle, The IBJ

aschoettle@ibj.com

Getrag Corporate Group is blaming a deal gone bad with Chrysler LLC for bankrupting a subsidiary the German transmission manufacturer formed to build and manage a $530 million plant in Tipton.

Officials in Getrag's U.S. headquarters in Sterling Heights, Mich., filed for bankruptcy protection in Detroit this morning for its Getrag Transmission Manufacturing LLC unit, stating it owes more than $500 million on its Tipton plant.

Getrag officials said in court papers the 900,000-square-foot Tipton facility is 80-percent complete. Construction stopped in October.

Getrag officials said the Tipton facility was being built for the sole purpose of manufacturing dual-clutch transmissions for Chrysler. Now, the officials said, the plant's future is uncertain.

"Right now, we're meeting with [state and Tipton] officials as well as discussing the future of the plant internally," Getrag spokeswoman Michelle Culver said.

Before the brakes were put on the project, it was scheduled to open in September 2009. Employment was expected to reach 1,200 by the time it hit full capacity in 2011.

Getrag was building the Tipton plant with Chrysler, but the deal soured in October when Chrysler filed a lawsuit claiming Getrag violated a contract by failing to obtain as much as $300 million in debt financing before construction of the plant was underway.

Getrag countered that Chrysler rejected a financing plan it offered.

The plant is north of Indianapolis and south of Kokomo, where Chrysler operates transmission plants. Some of the work from those plants was expected to be shifted to the new Getrag facility, which is on 103 acres along U.S. 31.

Last month, Getrag said it hoped to find another customer for the transmissions the plant would produce. Around that time, Getrag officials met with the Indiana Economic Development Corp. to discuss the situation, but details were not made public.

Real estate brokers have said another manufacturer could find the building attractive. The building also might work in certain circumstances for a distribution center.