Chrysler will receive help from the state in exchange for its investment.
The Indiana Economic Development Corp. offered Chrysler up to $11.5 million in conditional tax credits and up to $200,000 in training grants.
Those tax credits are performance-based, so until Hoosiers are hired, the company is not eligible to claim the incentives.
The cities of Kokomo and Tipton offered additional tax abatements.
Chrysler is spending $212 million of its own money for additional tooling and equipment to produce the eight- and nine-speed transmissions at Kokomo Transmission, Kokomo Casting and Indiana Transmission I plants, officials said.
Work on the facilities is scheduled to begin in the second quarter of 2013, with equipment and tooling to be installed in the fourth quarter.
The Kokomo plants are already starting to build the eight-speed transmissions and will build the nine-speed once work at the Tipton site is complete.
Marchionne said the eight-speed transmission is already appearing in the Jeep Grand Cherokee and rear-wheel-drive cars like the Chrysler 300 and Dodge Charger.
With Thursday’s announcement, Chrysler said it has now invested more than $1.6 billion in Kokomo.
“These new investments and new jobs are a testament to the determination we all had — management, labor and our work force — to making the best of the second chance we were given in 2009,” Lortz said.