Kokomo Common Council approves $160 million tax abatement for Delphi

ken.delabastide@kokomotribune.com

The Kokomo Common Council approved a $160 million tax abatement for Delphi Electronics & Safety that will retain 3,000 jobs in the community.

The Common Council on Monday unanimously approved the 10-year abatement for Delphi. The request covers new electronics manufacturing equipment and $100 million for the replacing of equipment currently in use at the Kokomo operations.

Ron Jobe, financial director for Delphi, said the investment is to continue with hybrid technology work being done at the plant.

Following the vote, Jobe said the investment has already been started to be made in Kokomo.

"We're excited about the opportunity to bring new technology to our Kokomo operations," he said.

During a public hearing before final passage, local resident Paul Fletcher asked how much Delphi still owes in back taxes as a result of its bankruptcy in 2005.

Council member Mike Karickhoff said the city is still owed $2.4 million and that Kokomo is one of the creditors when the company leaves bankruptcy.

"Your going to approve the tax abatement and I'm okay with that," Fletcher said, "but you're trying to save a sinking ship."

Fletcher said conditions should be included in the abatement to protect local taxpayers.

Karickhoff said there is a provision in the abatement that if Delphi doesn't live up to the agreement that city can seek to collect the abated taxes.

Council members approved a preliminary resolution to provide Chrysler LLC with a $68 million 10-year tax abatement to bring in new equipment to help manufacture the new Phoenix engine.

A public hearing and final approval of the tax abatement is scheduled for Oct. 13.

Karickhoff said the investment will retain 306 jobs at the casting plant in Kokomo.

"This is a difficult time," he said.

"I hope they're not sinking ships," Karickhoff said in reference to Delphi and Chrysler. "We want to make sure we have an economic climate to retain and expand jobs in the future."

Brian Harlow, Chrysler's general manager of powertrain operations, said the investment will allow the Kokomo operations to make components for the new Wet Dual Clutch Transmission being manufactured by the Getrag plant in Tipton and for the first-time engine components.

Harlow said the casting plant will be making the engine block for the Phoenix engine.

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.