Getrag to build transmissions with Chrysler

Formal announcement for Indiana plant set for Monday

David Phillips
Automotive News
June 14, 2007 - 2:45 pmINDIANAPOLIS -- Getrag Corp. of Germany and the Chrysler group plan to join Indiana officials on Monday to unveil plans for a transmission plant 40 miles north of Indianapolis.

Getrag has acquired a 145-acre site in Tipton County for a joint-venture plant that is expected to begin supplying Chrysler in 2009.

In April, the German company filed plans with the county to build the 700,000-square-foot factory, with an estimated price tag of $560 million. Employment is expected to reach 1,200 workers.

The plant is part of a $3 billion product development push by Chrysler to offer more fuel-efficient powertrains and to meet future federal fuel economy rules. Chrysler spokesman David Elshoff says additional details will be announced at Monday's event.

The Getrag project marks the first time Chrysler has formed a joint venture for a large-volume transmission. The company has independently assembled automatic transmissions for front- and rear-drive applications in nearby Kokomo, Ind., for decades.

The new so-called dual-clutch transmission will replace Chrysler's current four-speed automatic transmissions used in minivans and other high-volume passenger vehicles.

Annual volumes could reach 1.2 million units.

"With the Getrag partnership, Chrysler is receiving transmission technology already proven in Europe, enhanced performance and fuel economy, the ability to come to market in a timely way, and significant cost savings," says Eric Fedewa, an analyst with CSM Worldwide Inc. in Farmington Hills, Mich.

DaimlerChrysler disclosed last fall that it was considering the Kokomo area for the new factory.

While in development, the joint venture between Gertrag and Chrysler has been embraced by Cerberus Capital Management LP, which is acquiring an 80.1 percent stake in Chrysler for $7.4 billion.

Such global alliances in manufacturing, product development and distribution are expected to play a key role in Cerberus' recovery plan for Chrysler.

Chrysler is overhauling its North American business after posting a $1.5 billion loss last year. Under the restructuring, it is closing plants and cutting 4,700 U.S. hourly workers.

The plant is an integral part of what Chrysler calls its latest powertrain initiative. The company is spending $3 billion on new axle, engine and transmission plants, and upgrades to existing plants in Mexico and the United States.

In recent weeks Chrysler announced plans for three V-6 engine plants in Trenton, Mich.; Saltillo, Mexico; and Kenosha, Wis.

"With the consumer shift to more fuel-efficient vehicles, we are introducing new powertrains at an optimal time," Elshoff says. "At the same time, we are consolidating and simplifying our family of V-6 engines, resulting in lower tooling, supply and manufacturing costs."