Auburn Hills, Michigan – Chrysler will invest US$300 million into its existing transmission facilities in Kokomo, Indiana to modernize and retool for production of a new eight-speed automatic transmission.

The new fuel-efficient transmission will be used in future Chrysler Group vehicles, the company said. The investment, which is aided by approval of a tax abatement from the city of Kokomo, will fund the installation of equipment and special tooling to modernize Indiana Transmission Plant 1 and the Kokomo Casting Plant. Chrysler said the project will extend the life of both facilities and help retain nearly 1,200 jobs.

The new transmission will be manufactured under license from Germany’s ZF Group, beginning in 2013. The agreement includes the purchase of transmissions manufactured by ZF.

“The new eight-speed automatic transmission will offer our customers refinement and comfort while achieving greater fuel economy and performance,” said Paolo Ferrero, senior vice-president of powertrain. “We look forward to integrating the new transmission into future Chrysler Group products and welcome its contribution to a corporate fuel economy improvement of more than 25 per cent by 2014.”

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