Getrag shopping for new partner for $530 million Tipton County transmission plant

With Chrysler LLC's termination letter in the mail Friday, Getrag Corporate Group is reportedly looking for a new customer.

A letter sent Friday to the German transmission manufacturer was "written notice of termination of the financing options agreement to Getrag, effective immediately," according a Chrysler statement released Saturday.

The termination of the agreement comes just weeks after a Chrysler lawsuit was filed in a Michigan court, accusing Getrag and its U.S. subsidiary of breach of contract and fraudulent misrepresentation of Getrag's ability to obtain financing for the $530 million joint venture facility in Tipton County.

The two companies have been in negotiations for some time, trying to reach an agreement, Secretary of Commerce Nathan Feltman said Saturday.

"Literally for six to eight months now, they have been negotiating in regards to a supply agreement," Feltman said. "Unfortunately, from our perspective, it now seems that's not going to work out."

The deal's demise leaves Getrag without a primary customer for the dual-clutch transmissions it's expected to manufacture at the plant nearing completion at Ind. 28 and U.S. 31.

The future of that facility has a been a source of speculation since news broke earlier this month that negotiations between the two companies were in trouble.

Feltman said he's "pretty confident there's a company out there that will see this as an opportunity."

"Getrag made the investment in Tipton on the assumption that they would work this agreement out [with Chrysler]," Feltman said. "Now, it's up and built, a major investment has been made.

"It's a Getrag-owned facility, and they have put a lot of money into it, so they are certainly going to want to make it productive."

That goal, according to Feltman, is shared by state officials, including Gov. Mitch Daniels.

"There were a lot of people looking to go to work [at Getrag], and we will do our best to make sure they will do so," Feltman said.

He said the state will continue working with Getrag in regards to the Tipton facility.

"The governor and I are working closely with Getrag executives as they pursue additional options for the facility," he said.

Mitch Frazier with the Indiana Economic Development Corp. also confirmed Saturday that Getrag is actively looking for additional opportunities.

"They are shopping for another partner," Frazier said.

The failure of the joint venture has also left Chrysler in a lurch, having lost its U.S. source of fuel-efficient transmissions.

"Chrysler is evaluating its range of possible options to meet its needs for fuel-efficient transmissions in future products," reads Chrysler's statement.

Chrysler's planned purchase of the Getrag transmissions manufactured in Tipton would have been teamed up with the new Phoenix engine slated for use in future Chrysler models. The Tipton plant was expected to produce up to 700,000 transmissions annually.