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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowA central Indiana county is demanding that Chrysler LLC return $5.5 million in county-issued bonds and repay at least $4.5 million it set aside for a sprawling transmission plant that a Chrysler supplier stopped building last year.
Tipton County’s commissioners said yesterday in a statement prepared by an Indianapolis law firm that Chrysler sent them a letter Feb. 24 refusing to repay the bonds and money the county had approved for the $530 million Getrag Transmission Manufacturing plant.
“We are very disappointed and upset by Chrysler’s rejection of our requests,” Jane Harper, a county commissioner, said in the statement. “We merely called for Chrysler to honor its obligation under the commitment agreement we all agreed to in 2007.”
Getrag halted construction on the 900,000-square-foot plant in October after Chrysler pulled out of a financing agreement for the plant, which was designed to produce energy-saving dual-clutch transmissions for Chrysler.
The plant about 35 miles north of Indianapolis was expected to create up to 1,400 jobs.
In late November, Getrag filed for Chapter 11 bankruptcy protection for the plant, which is about 80-percent complete.
The county commissioners said yesterday that after months of consultations with legal and financial advisors, they were calling on Chrysler to “honor its commitment” and return the bond money and “at least $4.5 million for amounts owed to third parties” in the project.
In their statement, commissioners said that $5.5 million in county-backed bonds were issued Sept. 16 for both Getrag and Chrysler based on their project expenditures.
The next day, the county’s statement said, “Chrysler advised Getrag that it would not provide the assurances that Getrag had requested to enable Getrag to obtain debt financing for the project,” citing Getrag bankruptcy papers and litigation between Chrysler and Getrag.
“If Chrysler had fulfilled its obligation to inform Tipton County of the project’s status, we would not have issued the bonds,” said former Tipton County Commissioner Tom Dolezal.
Chrysler spokesman Dave Elshoff said in a statement yesterday that the automaker is “very sympathetic to the economic stress” the project’s scuttling has caused. But he said that the fault lies not with Chrysler but with Getrag’s “apparent failure to perform.”
Elshoff said the plant was to be owned and operated by Getrag, and that Chrysler was then to purchase Getrag transmissions made at the plant.
“It is Getrag that abandoned the construction of the transmission plant, not Chrysler. In addition, the various contractors, subcontractors and suppliers were all employed directly or indirectly by Getrag, not Chrysler,” Elshoff’s statement said.
Aside from the county’s bond and financing expenditures, the county’s statement said that electrical, mechanical and other contractors are owed more than $44 million for their work on the plant.
“Several contractors are in danger of going out of business because of the unpaid bills,” the commissioners’ statement said.
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