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Chrysler Plans Another Plant for Kokomo, Ind. : Autos: Decision comes after workers protested bid to move elsewhere. The $1-billion factory would save 2,000 local jobs.

August 08, 1995|From Bloomberg Business News

KOKOMO, Ind. — Chrysler Corp. is expected to unveil plans this week to build a $1-billion truck transmission plant in Kokomo, Ind., a move that would save at least 2,000 jobs in the area and probably generate many more.

The announcement, expected to be made Thursday by Chrysler Chairman Robert Eaton and Indiana Gov. Evan Bayh, would come four months after 5,500 workers at the company's existing Kokomo plant walked out for one day to protest the decision to find a site outside the region to build transmissions for Jeep Grand Cherokees and Dodge Rams, among other light pickups.

To get the workers to return to their jobs, Chrysler changed course and agreed to open a factory near the existing one to make new rear-wheel-drive, automatic transmissions. The size and location of the new plant hadn't been revealed until now.

Chrysler declined to comment.

Kokomo civic and business leaders made it clear they wanted Chrysler to stay. PSI Energy, the area's public utility, donated its helicopter so Chamber of Commerce officials could fly Chrysler executives over possible factory sites.

"We think we did a good job of convincing them to stay," said James Brannon, president of the Kokomo/Howard County Chamber of Commerce.

The auto maker settled on 280 acres owned by Norfolk Southern Railroad, about five miles from Chrysler's current plant, according to real estate brokers familiar with the transaction.

Electric and gas utilities agreed to spend between $250,000 and $2.5 million in improvements so they can service the remote site.

The city of Kokomo and Howard County showed Chrysler they also know the value of incentives. All told, state and local governments will give Chrysler between $10 million and $20 million.

The new plant will be about 1 million square feet, or about a third the size of the existing plant, said Glen Boise, executive director of the Kokomo/Howard County Planning Commission.

Indiana's Department of Commerce is expected to help pay for the cost of retraining workers to make the new transmissions, which are designed to change gears more smoothly for a better ride and better gas mileage. The agency, which declined to comment on the new plant, gave Chrysler a $1-million training grant last year when the company expanded its existing Kokomo plant.

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