Chrysler Invests In US Plants, More GM Jobs

DEE-ANN DURBIN

DETROIT (AP) — Hard-hit Kokomo, Ind., got a big boost from Chrysler on Tuesday when the automaker announced it plans to pump another $843 million into three factories to build a new front-wheel-drive transmission.

General Motors, meanwhile, will announce Wednesday that it will invest $163 million in two Michigan plants and an Ohio foundry to make small-car engines, according to a person familiar with GM's plans. The person was not authorized to talk about the plans ahead of the formal announcement and asked not to be identified. GM says the moves will retain 184 jobs.

Both companies are recovering from last year's auto industry meltdown when they were forced to take government bailouts to make it through bankruptcy protection.

The Kokomo announcement came just hours ahead of a visit to the plants by President Barack Obama and Vice President Joe Biden, who promoted the benefits of the auto industry bailout.

Chrysler said it will pay for equipment to modernize the two Kokomo transmission factories and a casting plant. The investment will extend the life of the plants and help retain nearly 2,250 jobs, equipping them to build a new front-wheel-drive transmission for unspecified future vehicles, the company said.

The automaker already has announced that it will build a new 8-speed automatic transmission in Kokomo in 2013.

Chrysler said the new investment, to start early next year and run through the third quarter of 2012, would raise the company's commitment to the Kokomo plants to $1.1 billion, pushing its total U.S. factory investment to nearly $3 billion since it emerged from government-funded bankruptcy protection in 2009.

The Auburn Hills, Mich.-based automaker, now run by Italy's Fiat Group SpA, was near death before getting a $12.5 billion bailout from U.S. taxpayers to make it through bankruptcy. In exchange, the government got a 10 percent stake in the company, which still owes taxpayers roughly $5.7 billion in loan payments.