Chrysler Dual-Clutch program in doubt
October 10, 2008 by Matt Brogan
Not a week after we brought you news of Chrysler’s intentions to expand the use of Getrag sourced dual-clutch transmission, comes an announcement today that Chrysler has successfully sued German manufacturer Getrag in a Michigan court for failing to raise the $300 million in debt financing needed to build and equip a plant in Tipton, Indiana to produce the transmissions.
The plant, which was expected to have been opened in April 2009, was to be the sole source of Chrysler’s dual-clutch transmissions in the United States and now jeopardises the entire dual-clutch program, said Crysler spokesman David Elshoff.
Elshoff also said that although construction work was continuing on the plant today, he could not speculate as to whether any further work would continue in to the future.
Under the partnership, Chrysler would have seen 700,000 transmissions build in the Indiana plant annually with some 1,200 staff employed at the $350 million dollar factory.
The lawsuit indicated that Getrag had sought to secure the money required to build the plant from German banks on the proviso that the money was guaranteed by the German government. Chrysler argues that it should have been informed of that condition before it signed off on the definitive agreement.
As it turned out the German government would only guarantee the debt if Chrysler set up a $300 million escrow account to assure repayment. It is alleged Chrysler was awarded favour as Getrag “did not make a good faith effort to get the money”.
There is no word on how this will effect supply of the transmission in Australian Chrysler Group vehicles at this stage. We’ll endeavour to keep you posted.
Print it: 
Let’s hope Getrag drag Chrysler through the courts long and hard on this one – if it’s true that Chrysler signed an agreement without reading it first, they deserve all the court costs awarded against them.
“Chrysler argues that it should have been informed of that condition before it signed off on the definitive agreement.”
Not to mention Chrysler will end up NEVER having a DSG gearbox, since no-one else would ever supply them. Getrag will be able to fill all their capacity by supplying Ford/Volvo.
Could be the mistake that sinks Chrysler for good – the world’s car market doesn’t need their second rate offerings anyway.
Reckless 1. Thats a bit harsh but I understand your sentiment. More liekely one scenario is that Chrysler and GM will merge. Cerberus (the owner of Chrysler) owns 51% of GMAC, the finance arm of GM. There is a lot of talk that Cerberus wants the other 49% and is preparred to give GM the manufacturing divisions of Chrysler in exchange for the rest of GMAC. Neither side of the companies are talking but neither are denying it either. The other hot rumor is that Ford are selling their stake in Mazda to raise cash as they are rumored to be running out of cash. The other option is filing for bankruptcy protection but that will also have a negative effect on future cash flow so selling Mazda is the better option. Who would buy it? Well the rumor is VAG (a bit busy fighting off Porsche) BMW or Daimler Benz as it gives all three an entrance into Japan. The other rumor I read was Hyundai.