"It's still on," Chrysler executive vice president for product development told Reuters. "It is still very much the right technology for us to use."
DETROIT (Reuters) - Chrysler LLC expects a resolution to a dispute with German parts supplier Getrag Corp that has frozen construction on a $530 million transmission plant in Indiana, a senior executive said on Sunday.
"It's still on," Chrysler executive vice president for product development told Reuters. "It is still very much the right technology for us to use."
In June, Chrysler and Getrag signed a complicated deal intended to supply fuel-saving, dual-clutch transmissions to the automaker starting in 2009.
Under the original plan between the two companies, Getrag was to have had operational responsibility for the Kokomo, Indiana plant, which was scheduled to employ just over 1,000 Chrysler workers represented by the United Auto Workers union.
!ADVERTISEMENT!Chrysler has not commented specifically on the nature of its dispute with Getrag, but Klegon said the automaker expected to be able to work through the problems.
"We feel like we can still get it done," he said.
The new transmissions are expected to be paired with a new family of "Phoenix" V-6 engines that Chrysler has said it will build as part of a $3-billion investment in new powertrain technology intended to improve the fuel efficiency of its product line-up.
Chrysler currently trails all other major automakers in fleet-wide fuel economy since it relies heavily on sales of sport-utility vehicles, such as the Jeep Wrangler, and trucks, such as the Dodge Ram pickup.
Under its new private owner Cerberus Capital Management, Chrysler has said it will make an accelerated push into alternatives to traditional engines, including hybrids.
Klegon said Chrysler had already begun negotiations with suppliers that could "start-stop" technology for its vehicles.
Such systems, which could cost several hundred dollars per vehicle, have the potential to boost fuel economy by up to 5 percent by shutting down an engine when a vehicle is idling, Klegon said.
Under such systems, the engine would restart when the driver releases the brake pedal.
Chrysler is working with suppliers Robert Bosch <ROBG.UL> and Siemens AG <SIEGn.DE> on that technology, Klegon said.
"It's a very attractive solution at a low cost for a small step up," Klegon said.
(For more on the Detroit Auto Show in Reuters blogs, see http://blogs.reuters.com/events/category/detroit-auto-show-2008)
(Reporting by David Bailey and Kevin Krolicki)
