(May 11, 2011) KOKOMO, Ind. — Not to be outdone by General Motors, Chrysler announced on Tuesday that it plans to spend an additional  $843 million at its transmission plant in Kokomo, Ind., for a new, nine-speed automatic transmission for its front-wheel-drive vehicles.

The announcement came on the same day that General Motors Co. confirmed it is investing $2 billion in 17 facilities, including $204 million at a Toledo plant to make an eight-speed automatic transmission. GM hopes to start building the transmission by the end of the year.

Chrysler will beat GM to the punch as it will start selling the Chrysler 300 and Dodge Charger with eight-speed transmissions in July. The nine-speeds are due by 2013.

Chrysler will partner with German supplier ZF Group for the production of the next-generation front-wheel drive nine-speed transmission. Chrysler hopes that by offering the nine-speed transmission that ZF is working on, the appeal of its models will increase.

ZF says the new unit brings extremely short response and shifting times, meaning that double shifts and direct multiple gearshifts can occur without the driver or passenger noticing. The transmission's electronic controls select the right gear for the driving conditions, eliminating unnecessary "stepping" — or constant shifting.

When combined with previously announced investments totaling $343 million in its Kokomo facilities, the new investment would make Kokomo the recipient of the largest investment — $1.1 billion — in a single year in a single community, pending the Kokomo City Council’s approval of Chrysler Group’s tax abatement application on Dec. 13, 2010.

The investment would fund the installation of equipment and special tooling to modernize the Indiana transmission plants and the Kokomo Casting Plant. The project would extend the life of these manufacturing facilities and help retain nearly 2,250 jobs.

”For years, Kokomo has been at the center of our powertrain strategy and the potential of an additional investment reaffirms that position,” said Sergio Marchionne, CEO, Chrysler Group. “When introduced, this new front-wheel drive transmission, along with the previously announced eight-speed transmission we will also produce in Kokomo, will transform our future products and position them as leaders in marketplace.

Sources: Chrysler, The Detroit News, media reports