Chrysler to save jobs, improve fuel efficiency

Posted June 9, 2010 at 3:05 p.m.

McClatchy-Tribune News | Chrysler is to announce today that it is investing $300 million in a factory at its Kokomo, Ind., complex, to make a new eight-speed transmission developed by German supplier ZF that will save jobs and improve fuel efficiency.

The investment will preserve about 1,200 jobs already at the Indiana plant. The transmission, which Chrysler will begin making in 2013, will be a key tool in Chrysler’s goal of boosting the fuel economy of its collective fleet by 25 percent by 2014.

Chrysler’s passenger cars averaged 28.3 m.p.g. in 2009, according to the National Highway Traffic and Safety Administration. That was well below the industry leader Honda at 36.5 m.p.g. and Toyota at 35.9 m.p.g. General Motors and Ford averaged 31.3 and 31.1 m.p.g., respectively.

Among light trucks, Chrysler’s average of 23.9 m.p.g. ranked behind Ford’s 24.7 and Toyota’s 25.8, but ahead of GM’s 22.5 m.p.g.

Chrysler declined to say which vehicles would use the eight-speed transmission, but Jim Hall, a product development consultant with 2953 Analytics in Birmingham, said Ram pickup trucks, Jeep Grad Cherokee and large cars such as the Chrysler 300 and Dodge Charger will likely incorporate it.

The more speeds in a transmission, the more smoothly it shifts between gears. That reduces the engine’s workload, which reduces its need for fuel.

The eight-speed transmission improves fuel economy by 14 percent over five-speed automatic transmissions, and 6 percent over six-speed automatics from ZF, according to Car and Driver magazine.

Chrysler makes all its transmissions in Kokomo, Ind., across four buildings. The oldest, Kokomo Transmission, opened in 1956. Indiana Transmission plants 1 and 2 opened in 1998 and 2003, respectively. The $300 million will go to modernize Indiana Transmission 1 and a nearby casting plant.

The city of Kokomo granted tax abatements on $43 million of new machinery for the factory.

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