Transmission Plant Drives Optimism

[skylight]

Set to open in 2009, Tipton facility staffed by Chrysler workers shifted from Kokomo will be critical to state's sputtering industry.

TIPTON, Ind. -- The latest hopeful sign for Indiana's tumultuous automotive industry can be seen on a quiet intersection about five miles from the center of town, where rows of earthmovers are starting to level the ground for a long-awaited, $530 million transmission plant.

When it opens in 2009, the plant will employ 1,400 people, turning out 700,000 fuel-efficient transmissions a year that workers, business leaders and government officials hope will catch on fast with motorists coping with high gas prices.

The project is a joint venture between German transmission manufacturer Getrag and automaker Chrysler Group. The companies are betting that this corner of Indiana can make the struggling automaker and its parts suppliers competitive again with other car companies.

While the project might help stabilize Chrysler, it represents the one-step-forward, one-step-back reality of Indiana's auto industry. Most of the new plant's workers, at least initially, won't be new hires. They'll be transfers from existing Chrysler plants in nearby Kokomo.

Statewide, thousands of auto jobs created mostly by Japanese manufacturers in recent years have been offset by job losses at Chrysler, Ford and General Motors. From 2003 to 2005, direct employment by automakers in the state was steady at 12,200 workers, despite the ups and downs of the industry's key players, according to the most recent annual figures from the Bureau of Labor Statistics.

Still, job security for Indiana's Chrysler workers was something to cheer. Monday, hundreds of Tipton residents turned out at a ceremony in front of the county courthouse to officially welcome the Getrag-Chrysler project.
The jobs will pay an average of $27 an hour, plus an additional $33 in hourly benefits, including retirement benefits.

Union officials cheered the new plant and said they worked hard to negotiate an agreement covering the facility. The local, with about 5,000 hourly workers at Chrysler, has seen its membership dip lately with retirements, and still has about 200 laid-off workers.

"We are the best transmission builders in the world, and we will make Getrag and Chrysler very happy they came to Tipton," said Guy Barger, president of United Auto Workers Local 685.

Across Indiana, the auto industry is undergoing a major transformation, as some companies struggle to survive and others ramp up for major expansions.
Just last week in Bedford, Visteon Corp., an auto parts maker spun off from Ford, notified its 685 workers that it will close next year in a cost-cutting move.

Ford said it would sell or close its 1,900-employee Indianapolis steering plant by next year, along with sister plants across the country employing 10,400 in its Automotive Components Holding group.

In the past few years, Chrysler has cut jobs statewide to about 5,000, from more than 9,000. Last year, it idled thousands of workers in Kokomo.
Guide, a former General Motors unit, permanently closed its operations in Anderson in January, idling most of its remaining 1,325 workers.

Yet Japanese automakers are expanding here. Honda is building a 2,067-employee assembling plant in Greensburg, slated to open next year. Toyota recently opened a 1,000-employee Camry car line at the underused Subaru car plant in Lafayette.

Gov. Mitch Daniels, attending Monday's announcement here, acknowledged the auto industry is undergoing huge changes that are challenging Indiana. But he pointed out that the state has won three big automotive investments in the past year, more than any other state.

"We're under no illusion that we're immune from worldwide trends," he said. "You have to run hard to stay in place, let alone to gain on the field. But we're gaining."

The new, 804,000-square-foot plant will be on a 145-acre site at the intersection of Ind. 28 and U.S. 31. It will produce a fuel-efficient transmission expected to be used in various Chrysler, Dodge and Jeep vehicles by 2010.

The plant will be staffed, at least initially, by workers at three Chrysler plants in nearby Kokomo, which make an older type of transmission. Workers can volunteer to move from those plants to the new plant, union and company officials said. The openings left behind could be filled down the road.

"The first priority is to fully employ all the people we have, and if we have any work left over, then we will be working to recruit people, together with Getrag," said Richard A. Chow-Wah, Chrysler's vice president for powertrain manufacturing.

The plant will get a big financial boost from Indiana taxpayers. The Indiana Economic Development Corp. has offered about $8.75 million in tax credits and $500,000 in training grants. The state also agreed to spend $3.4 million on infrastructure improvements, including upgrades to Ind. 28 and East Road.

Chrysler has been in Indiana since 1903. The company remains a key piece of the state's industrial economy, buying auto parts from more than 100 independent supply plants in Indiana that would have to lay off workers if Chrysler sales continue to slide.

Last month, Chrysler's parent, DaimlerChrysler of Germany, announced it would sell Chrysler to a private equity group, a move that initially raised uncertainty about the future of this plant, which had been under discussion for more than a year. But officials said Monday that the sale would not affect the project.

Getrag, with headquarters in Untergruppenbach, Germany, is the largest independent automotive transmission maker worldwide, with an annual volume of more than 3 million transmissions and 1 million axles.

Getrag also is betting the move will pay off. Ulrich Kohler, Getrag's vice president for manufacturing engineering, said the company has not signed any orders for the new products, called "dual clutch" transmission technology, although it has a memorandum of understanding with Chrysler. For now, Getrag makes transmissions for Chrysler's Tangerine PT Cruiser Turbo and PT Cruiser Convertible.


Source: IndyStar.com

[BeachBum]

Thanks for the article. I grew up in Indiana in the GM-dominated town of Anderson. My grandfather retired from there but the town slowly lost most of it's auto plants. It's good to see Indiana getting back into the swing of things.

Living in Tennessee now, my step-father-inlaw works for Delbar Corp and he was telling me that they recently got a very big contract from Chrysler. They will be making mirrors for the Chargers, Rams, Durangos and a few of the smaller vehicles in the fleet including the Cruiser if I'm not mistaken.

[tonydanza]

Excellent news! Hopefully the plant is being built by union ironworkers

[bobs turbo pt]

thanks for sharing the story !!