Chrysler Group, retrieved from bankruptcy by $7 billion in government loans, greeted President Obama's visit to this embattled auto town Tuesday with plans to invest $843 million into local transmission manufacturing facilities.

Chrysler officials said the investment would modernize and keep open two of its Kokomo plants, and help retain 2,250 jobs.

The plants will produce advanced front-wheel drive transmissions for future Chrysler vehicles, including hybrids.

It was the second positive Chrysler announcement for this city devastated by auto plant closings and layoffs in recent years. In June, the company announced a new, eight-speed transmission line would be made here.

”For years, Kokomo has been at the center of our powertrain strategy and the potential of an additional investment reaffirms that position,” said Sergio Marchionne, CEO of Chrysler, in a statement.

Obama and Vice President Biden arrived in Kokomo shortly after the Chrysler announcement, citing it as evidence of the payback on the government's controversial bailout of the U.S. auto industry.

Obama is the first president to visit Kokomo, a city of 45,000 mostly blue-collar residents, since President Truman in 1948 during a campaign whistle stop.

The Obama-Biden trip was part of the White House to Main Street tour on the economy, and an opportunity to tout a turnaround story in a state they carried in 2008 yet lost to the Republican candidates in the recent midterm elections.

Obama and Biden also used the occasion to showcase the administration's stimulus spending plan that they claim has saved thousands of public safety jobs across the country.

They met at Fire Station 1 in downtown Kokomo with three firefighters who had been laid off due to budget cutbacks and then rehired when $850,000 in federal stimulus funds became available to the city.

Afterwards, they shared a lunch of club sandwiches and potato chips with Mayor Greg Goodnight, the fire chief, and the president of the local firefighters union.

Obama told the union chief "you don't have a stronger advocate than the vice president of the United States."

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Daniel Human is a reporter for the Kokomo, Ind., Tribune.

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