Stellantis puts massive Tipton manufacturing complex on the market
Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
Automotive manufacturer Stellantis NV plans to sell off its massive transmission manufacturing complex in Tipton as part of a restructuring plan tied to an agreement the company reached with the United Auto Workers union last year, the company confirmed to IBJ on Wednesday.
The Netherlands-based parent of Chrysler, Dodge, Fiat, Jeep, Ram and other brands quietly suspended operations in Tipton in June and moved most of the employees there to its Kokomo facilities. The company said the complex at 5880 W. State Road 28 will remain closed until it is sold.
The 781,500-square-foot Tipton Transmission Plant, which includes three buildings and spans 103 acres, first began production in April 2014 with a focus on building nine-speed transmissions for numerous Stellantis vehicles.
“Stellantis continues to look for opportunities to improve efficiency and optimize its manufacturing footprint to ensure our future competitiveness in today’s rapidly changing global market,” company spokesperson Ann Marie Fortunate said in an email to IBJ.
The property, about 20 miles north of Noblesville, is being sold in its entirety, with brokers Grant Lindley and Patrick Lindley with the Indianapolis office of Cushman & Wakefield marketing the site with another vehicle manufacturing or general industrial user in mind, according to a copy of a property brochure.
Stellantis declined to provide an asking price for the facility and Grant Lindley deferred an inquiry about the property back to the company.
The decision to offload the facility is tied to Stellantis’ strike-ending agreement with the UAW in October, Fortunate said. That portion of the deal, first proposed in September, included a plan to consolidate up to 18 facilities across the United States to streamline the company’s operations, with the Tipton plant being the only affected facility in Indiana. Stellantis doesn’t expect any jobs to be lost as part of those consolidations.
The largest structure at the site, the production building, includes 520,000 square feet of usable production space, along with with 45,000 square feet of office space and a 21,000-square-foot basement with three classrooms. It also has men’s and women’s locker rooms at 2,400 and 2,100 square feet, respectively.
The warehouse building, which is connected to the production structure by a walkway, is about 187,500 square feet. A separate 34,000-square-foot energy center or powerhouse is located between the two buildings, but is not structurally connected to either.
Most of the 919 surface parking spaces are located adjacent to the production building. The roof of the main structure is original.
The property was originally set to be home of Getrag Group, which in 2007 said it planned to build and manage a $580 million, 1,400-person operation focused on producing transmissions for Chrysler.
But those plans—and construction on the then-80% complete building—were halted in October 2008 after Chrysler withdrew from the deal and sued Getrag, alleging the U.S. operation for the German company failed to secure as much as $300 million in debt financing for the project before starting construction.
Both companies filed for bankruptcy in 2009 and the site was largely abandoned for nearly six years. A solar company also eyed the building, but withdrew those plans due to its own financial issues.
Fiat Chrysler Automobiles, a predecessor of Stellantis, said in February 2013 it would acquire the factory and invest $162 million to finish the property, establishing it as an additional assembly line for the nine-speed transmission, accompanying a 1.2-million-square-foot facility in Kokomo that began building the same transmissions around the same time.
The company secured $12 million in tax credits from the Indiana Economic Development Corp. for the project.
When it opened, the facility produced transmissions for the Toledo-assembled Jeep Cherokee and the Chrysler 200 assembled in Sterling Heights, Michigan, as well as Fiat transmissions. It later added transmissions for the Chrysler Pacifica and its hybrid counterpart, the Ram ProMaster City and the Jeep Compass and Renegade.
The Tipton and Kokomo plants saw the 5 millionth nine-speed transmission roll off the production line in August 2022.
Tipton employed 863 hourly workers until late 2021, when it laid off about 200 production personnel ahead of opening its Kokomo Engine Plant. Stellantis spokesperson Fortunate said the 300 people who were employed at the Tipton plant when it ceased operations last year “have been reassigned to Kokomo-area facilities.”
According to its website, Stellantis employs more than 6,400 workers across four Indiana facilities—all of which are in Kokomo—including two transmission plants, an engine plant and a casting facility. Those figures consist of of 5,757 hourly employees and 664 salaried. Most employees in the facilities are union members in UAW Local 685, 1,166 or 1,302. The Tipton workers were part of UAW Local 685.
Despite plans to sell the Tipton property, Stellantis said it has big plans for Indiana.
The company since 2020 has invested about $780 million as part of its strategy focused on electric and hybrid vehicles. That includes a $643 million plan to produce a new engine for conventional and plug-in hybrids, as well as $155 million for electric drive module production.
The company said it is also spending more than $6 billion as part of a partnership with Samsung SDI to build two battery gigafactories in Kokomo, with the first set to start production in 2025. The second is set to open in early 2027. Together, the facilities are expected to employ about 2,800 people.
The StarPlus Energy LLC partnership’s two projects have been promised up to $685 million in incentives from the IEDC.
The first deal, for a project initially expected to cost $2.5 billion, has state incentives valued at around $445 million, with $187 million in direct benefits across varying incentive types and $258 million in redevelopment tax credit loans for infrastructure and other to-be-determined uses.
The second deal, for another $3.2 billion investment, is pegged at around $208.5 million, but contracts for those incentives have not been uploaded to the IEDC’s transparency portal.