Chrysler Group LLC announced its plans to invest around $374 million in its four plants and to add approximately 1, 250 new jobs in Indiana to improve its transmission production.

The investment will make the company the largest transmission installation worldwide. Chrysler is majority owned by Italy’s Fiat S.p.A. (ADR) (PINK:FIATY).

Chrysler Group logo

According to the company, it will invest $212 million to purchase additional equipment and tools for its Kokomo Transmission, Kokomo Casting and Indiana Transmission I plants.

The car company said it will produce eight and nine-speed transmissions  and it will create 400 new jobs in the three plants.

The car manufacturer expects the work on the facilities to start in the second quarter, and the installation of new equipments and tooling will be done by in the fourth quarter this year.

The remaining $162 million will be invested to its new Tipton Transmission plant to develop a new assembly site for the production of nine-speed transmission. Chrysler plans to add 850 new jobs in the plant. Chrysler expects its production to begin in the first quarter of 2014.

In a statement, Chrysler Group Chairman and CEO Sergio Marchionne said, “Our investments in Kokomo and Tipton are a tribute to the character of the men and women of Chrysler who survived a near-fatal experience and have embraced the challenge of building an enterprise that is able to compete with the best in the world. Our powertrain team has consistently demonstrated the ability and the willingness to think in unconventional ways in order to exceed expectations.”

On the other hand, Ken Lortz, UAW Regional Director said,  “These new investments and new jobs are a testament to the determination we all had – management, labor and our workforce – to making the best of the second chance we were given in 2009. In partnership with the UAW, Chrysler Group is helping grow good paying manufacturing jobs and securing the future manufacturing base in this country.”

Chrysler is also celebrating the start of the production of the eight-speed transmission utilized in the new Jeep Grand Cherokee and Dodge Charger at the Kokomo plant.

According to the car manufacturer, the eight-speed transmission installed in Grand Cherokee drives the new Eco-Diesel and 3.6-liter Pentastar V-6 engine, which is expected to achieve 25 mpg highway and more than 600-miles driving range.

According to Chrysler, the additional investment brings the total investments of the company in Kokomo for the production of eight and nine-speed transmissions to over $1.6 billion. Currently, the company has more than 6,100 employees in Kokomo.

Since 2009, Chrysler’s investments in its facilities in the United States increased to almost $5.2 billion and added approximately 8,000 hourly jobs.