Chrysler Group LLC will invest $300 million at two Indiana plants to build more efficient eight-speed automatic transmissions to help it meet fuel economy goals, the automaker said on Wednesday.
Chrysler said it would make improvements to transmission and casting plants in Kokomo, Indiana, and had reached an agreement with Germany-based auto parts supplier ZF Group to produce its transmissions starting in 2013.
The investment, which is the largest in the United States for Chrysler since it emerged from bankruptcy in 2009 under the management control of Italy's Fiat SpA (FIA.MI), will save nearly 1,200 jobs, Chrysler said.
Under the licensing and supply agreement, Chrysler will begin receiving the eight-speed transmissions from a ZF plant in Germany while the transmission plant is being set up in North America, ZF said in a statement.
Kokomo provided tax abatement incentives to support the investment, which includes equipment and tooling, Chrysler said. Chrysler aims to improve fuel economy across its vehicle lineup by more than 25 percent by 2014 as automakers look to meet government mandates for increases in fuel economy.
Chrysler previously has announced investments in new engines and transmissions.
