By SCOTT SMITH, Kokomo Tribune staff writer

Getrag's chief financial officer expressed surprise Monday in the wake of a lawsuit filed by Chrysler LLC against the German firm, marking the first statement from Getrag Corporate Group since Chrysler's filing Wednesday.

Chrysler filed a lawsuit in Oakland County, Mich., Circuit Court, accusing Getrag and its U.S. subsidiary, Getrag Transmission Manufacturing LLC, of breach of contract and fraudulent misrepresentation while seeking financing for the Tipton County plant under construction.

It charged the companies with only seeking foreign financing which would require a German export bank guarantee with "burdensome" stipulations by the German government; breaching a provision of an agreement that no government authorization would be needed; and misrepresenting their ability to obtain financing.

"Having worked closely with Chrysler to secure the financing of this project, we were stunned to receive this lawsuit," Getrag Chief Financial Officer James Sheehan said in a press statement issued early Monday afternoon.

"GETRAG strongly disagrees with any claim by Chrysler that it has violated any agreements between the parties and GETRAG has acted in good faith with Chrysler to develop the Tipton project. It is our hope we can discuss this matter with Chrysler in the near future and resolve it in the best interests of both companies, the automotive supply chain for this project, and the Tipton community."

The statement said Getrag officials have requested a meeting with their Chrysler counterparts, but offered no details as to whether a meeting has been scheduled.

"Since receiving the lawsuit, Getrag has contacted Chrysler's representatives to arrange a meeting to discuss and better understand the situation. In the meantime, Getrag hopes to continue the [Tipton County] project without any unnecessary delays caused by these unanticipated circumstances," the press statement continues."

Chrysler officials acknowledged Getrag's statement, but would not discuss it.

"As this matter is soon to enter litigation, I wouldn't care to comment," Dave Elshoff, senior manager of international market communications, said Monday afternoon.

Speculation in the financial world continues to surround the lawsuit, with analysts last week suggesting Chrysler - now owned by the Cerberus private equity group - balked at giving guarantees Getrag needs to obtain financing.

Chrysler, analysts said, is concerned about the possibility of liens being placed on any of its assets, which would make the company less attractive to a potential buyer.

Plans call for the Getrag plant, located at U.S. 31 and Ind. 28, to employ 1,400 people and begin operating in September 2009. Chrysler is expected to be the principal customer for the 700,000 transmissions that are to be produced annually at the plant.

In August, Chrysler executives asked the Kokomo Common Council for a tax abatement on $68 million in new equipment the company wants to install at its Kokomo operations. Much of the equipment would be used to produce parts for the Getrag transmission plant in Tipton.

Over the weekend, speculation grew that Chrysler and General Motors had entered discussions regarding a takeover by GM.

The Detroit Free Press reported Monday Chrysler chairman and chief executive officer Bob Nardelli admitted to employees in a memo the company is looking at "strategic options."

"I can tell you that we have approached and have been approached by third parties who are interested in exploring future possibilities with Chrysler," Nardelli was quoted as saying. "As the company evaluates strategic options to maximize core operations and leverage its assets, we engage in a dialogue with these parties. We do so keeping in mind our vision, our mission, and the best interests of those who have shown tremendous support for this company - including you, our employees, dealers, suppliers and customers."

Jane Jankowski, spokesman for Indiana Gov. Mitch Daniels, said state assistance promised last year would not change.

The state offered Getrag $12.65 million in incentives to locate in Tipton County, including $8.75 million in performance-based tax credits and $500,000 in training grants. The Indiana Department of Transportation provided $3.4 million for improvements to Ind. 28.

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