The Kokomo facility has been in operation since 2003. (photo courtesy of FCA)

KOKOMO — Governor Eric Holcomb has announced a significant investment by a European automaker in its Howard County manufacturing operations.

The Indiana Economic Development Corp. says Fiat Chrysler Automobiles plans to invest nearly $400 million to expand and retool one of its Kokomo transmission plants for the production of a new engine. The new production is expected to require a workforce more than 1,000, which will include a combination of current FCA employees and new hires.

The investment was confirmed Tuesday during the governor’s State of the State address. The IEDC says the effort will support the assembly of the GMET4 engine, marking the first time FCA has built an engine in Indiana.

“Our Indiana operations have historically been known as the largest transmission installation in the world,” Brad Clark, vice president and head of engine and transmission manufacturing for FCA North America, said in a news release. “With this potential investment, FCA has the opportunity to diversify our presence in the region. We look forward to working with the state and city of Kokomo to finalize our investment plans.”

The Indiana Transmission Plant II facility in Kokomo, according to the FCA website, currently products components for eight-speed transmissions.

The IEDC did not specify how many new jobs will be created as a result of the investment. Construction on the expansion is slated to begin later this year.

“I am looking forward to working with FCA as we finalize this plan for this investment in our community,” said Kokomo Mayor Tyler Moore. “Kokomo has always been a leader in making the best automotive products in the world. I appreciate FCA’s commitment to Kokomo as an employer and a community partner.”

The IEDC has offered FCA up to $3.5 million in conditional tax credits and up to $500,000 in training grants, which the company will not be eligible to claim until Hoosier workers are hired for the new jobs. The IEDC says it has also offered up to $31.7 million in conditional tax credits from the Hoosier Business Investment tax credit program, as well as up to $30 million in assignable redevelopment tax credits.

The city of Kokomo will consider additional incentives and Duke Energy has approved incentives to offset a portion of energy costs.

The announcement could be the first of two big announcements from automakers this week. During his State of the State, Holcomb said he’ll be heading to Princeton later this week for a special announcement at Toyota Motor Manufacturing Indiana.