The partnership between Chrysler LLC and Getrag — and possibly the future of the alliance’s $530 million Tipton transmission plant — is headed to court.

Tuesday, Chrysler filed a lawsuit in a Michigan court accusing Getrag and a U.S. subsidiary of breach of contract and fraudulent misrepresentation of Getrag’s ability to obtain financing for a plant being built in Tipton County to manufacture dual-clutch wet transmissions.

“Getrag and its U.S. subsidiary, Getrag Transmission Manufacturing LLC, misrepresented their ability — and failed to use good faith in efforts — to obtain financing for the plant in Tipton,” Dave Elshoff, senior manager of international market communications for Chrysler, told the Tribune Wednesday.

The lawsuit was filed in Circuit Court of Oakland County, Mich., which includes Auburn Hills where both Chrysler and Getrag are headquartered. According to a Chrysler spokesperson, Getrag was served with the lawsuit Wednesday.

Elshoff had no information as to an initial court date.

An attempt to contact Randy Cyman, Getrag-Tipton’s human resources director and spokesman, was unsuccessful.

Plans call for the plant, located northeast of U.S. 31’s intersection with Ind. 28, to employ 1,400 people and begin operating in September 2009.

Chrysler is the principal customer for the 700,000 transmissions that are to be produced annually at the plant.

Asked if the future of the Tipton plant might best be described as “up in the air,” Elshoff agreed.

“That would be the impression until the matter is resolved,” he said.

“We don’t know what happens if the plant doesn’t go forward,” Elshoff continued. “We’re still assessing that. The failure to obtain financing in good faith draws into question our ability to work with Getrag to build transmissions in Tipton.”

Chrysler’s release announcing the lawsuit said it came to the legal action “after months of negotiations.”

A work stoppage at the site would be the second halt in the construction project in less than a year. On Dec. 21, an unspecified dispute between the two companies brought construction to a halt until Feb. 25.

The release goes on to say that, under its agreement with Chrysler, Getrag was obligated to obtain debt financing.

“Contrary to Getrag’s representations to Chrysler, Getrag knew that it could not obtain debt financing within the required time frame, and also knew that unless Chrysler was willing to assume significant additional obligations, debt financing could not be obtained at all,” the release said.

The company also says that Getrag expects Chrysler to reimburse it for costs incurred as part of the Tipton project.

The release goes on to state the lawsuit is an attempt “to recover all damages it has sustained as a result of defendants wrongful conduct and to obtain a judgment declaring that it has no obligation to reimburse defendants’ costs related to the Tipton plant.”

Tipton County officials were taken by surprise at the news.

“I am surprised,” said Vance Voorhis, chairman of the Tipton County Economic Development Corp. “This is kind of a curve ball. Obviously, this is not good.”

Voorhis said he was curious why corporations with the magnitude of Chrysler and Getrag would not have had the oversight to make sure the financing was in place.

“This is more than a downturn in the U.S auto industry,” he said. “It may be a case of too much capacity where a change in production numbers changes the finances on a project.”

Voorhis said Tipton County has formed a substantial Tax Increment Financing District with bonds of $14.1 million to bring the necessary infrastructure upgrades to the 147-acre site.

“I’m disappointed and shocked,” he said. “It would have been nice to have a heads-up. In the big picture, what is Tipton County?”

Monty Henderson, president of the Tipton County Board of Commissioners, said word of the lawsuit was news to him.

“Anytime something like that is going on, it gets your attention,” he said. “This has been a tough deal from Day One. They did the groundbreaking without the agreement in place.”

Henderson said county officials were finishing up the legal work on creation of the TIF district.

“I’m sure we will have to stick to our agreement and get the infrastructure in place,” he said. “This doesn’t change anything.”

Henderson said the $11 million of the TIF bonds were already purchased by the two companies so that there is some protection for taxpayers.

Tipton Mayor Dan Delph said he learned there was a problem late Wednesday from a worker with Chrysler in Michigan by telephone.

“I didn’t know there was a problem,” he said. “The number two man from Getrag was in Tipton [Tuesday], but I didn’t meet with him.”

When asked if he was disappointed that Tipton was not informed, Delph said sometimes the government is the last to know.

“I am concerned when people can’t get together,” he said. “I will try to find out what is going on.”

As far as Getrag-dedicated jobs in the Kokomo Casting and Transmission plants, Elshoff said “it’s frankly too early to tell.”

“On behalf of membership of Local 685 and on behalf of Kokomo, I intend for all future sourcing of product for Chrysler transmission to be done by members of 685,” said Jeff Shrock, the local’s president.

Work at the construction site, however, was still under way Wednesday, according to Bob Sowinski, senior project manager Walbridge Aldinger, the project managers for the Getrag site.

“They were working [Wednesday], and they’ll be working Thursday,” he said.