By MEGHAN DURBAK and KEN de la BASTIDE,
Tribune staff writers
TIPTON - Construction of a $530 million transmission plant in Tipton County has been suspended indefinitely.
"Until the parties can reach an agreement, we're at a standstill right now," said Randy Cyman, personnel director for Getrag, handling the Tipton development. "We're in discussions with Chrysler right now. ... I'm confident the parties will come to the right decisions."
Work at the plant, a joint project between Chrysler and the German manufacturer, stopped on Dec. 21. Officials with the Walbridge-Aldinger Construction Co., the general contractors on the project, said it was a holiday break. Earlier this month they indicated work would resume next Monday.
Dave Elhsoff, a spokesman for Chrysler, said company officials are aware the construction work is on hold.
"We're hopeful construction can resume after the meetings this week between both companies," Elhsoff said. "We expect construction can resume without any significant impact to the project's timeline."
Sources indicated there are several items the two parties want to address, including the price of each transmission and how many would be produced for Chrysler.
The Getrag Corporate Group - Chrysler LLC project is a $530 million venture that would build dual-clutch transmissions in Tipton, off Ind. 28 and U.S. 31. To date, site work for the plant includes a new road to the plant, a concrete foundation and portions of a frame for the main structure.
The plant is scheduled to be finished in 2009 and employ approximately 1,400 people: 1,170 at the plant and 230 in supporting jobs in Kokomo.
Officials with the Indiana Economic Development Corp. acknowledged the current situation between the two corporations.
"Our team has been in touch with Getrag and Chrysler. We all remain very optimistic that the project will continue as scheduled," said IEDC spokesman Mitch Frazier.
If the venture fell through, the state would rescind its incentives, Frazier said. "Our incentive program is based on job creation. If they didn't create those 1,400 jobs, they would not receive the tax credit that would go with it."
However, Frazier said he does not foresee that happening and remains optimistic.
Cerberus Capital Management, a privately-owned corporation, purchased Chrysler Group from Daimler-Chrysler in October.
U.S. Rep. Joe Donnelly, D-2nd, is concerned about the impact a Getrag plant in Tipton may have on Chrysler's existing transmission plants in Kokomo.
"We want Chrysler to be as successful as possible," he said. "There is a concern that Getrag will take more jobs from Kokomo. We don't want to make Getrag successful at the cost of jobs in Kokomo."
Getrag, a German-based company, purchased 147 acres of land off Ind. 28 and U.S 31, for $3.675 million, according to sales disclosure forms, said Tipton County Auditor Suzanne Alexander. As of Dec. 12, Tipton County paid $279,568 in EDIT funds to the Tipton County Economic Development Foundation for reimbursement of money to secure the Getrag site.
That money also paid for a drainage ditch from the site under Ind. 28 to the south; design and construction of 560 West and demolition of an existing house. It also includes $10,000 in earnest money given to Kip Bergman for the purchase of 23 acres of his land to complete 560 West.
This year, the county will need to pay approximately $57,522 for the 560 West project and approximately $52,000 for the loan the county took out to pay for 23 acres of Bergman's land. The principle of the loan for the land purchase is $576,803.32 to be paid off in 15 years.
Tipton County Commissioner Monty Henderson said he was surprised but still expecting a favorable outcome. He doubted it would impact Tipton in the "short term."
"The whole deal has been challenging because you have multiple parties involved," Henderson said. "They all have money and effort invested in this project, so I don't think it will be delayed too long."