Chrysler, scrambling to keep up with greater demand for its Jeep Grand Cherokee, is hiring 1,250 workers and increasing production of 8 and 9 speed transmissions.

Chrysler CEO Sergio Marchionne announced the expansion on the plant floor of the company's transmission plant in Kokomo, Ind.



(Read More: Sign of a Comeback: US Carmakers Are Hiring)



Meeting demand for Jeep

Chrysler is investing $374 million in its facilities in North-Central Indiana to keep up with demand for engines that power the Jeep Grand Cherokee. Last year, Jeep sold 154,734 Grand Cherokees, an increase of 21.1 percent.

As a company, Chrysler was the only member of the Big 3 to pick up market share in the U.S. last year. Chrysler's market share increased from 10.7 percent to 11.4 percent due to sales rising more than 20 percent. Chrysler is #4 in U.S. sales behind General Motors, Ford and Toyota.

(Read More: Ford Boosts Engine Production as Buyers Demand Fuel Efficiency.)



Expanding under Marchionne



For Sergio Marchionne, the Kokomo expansion is the latest move to beef up U.S. production under Fiat ownership. Since the Italian automaker bought a stake in Chrysler in April of 2009, it has invested $5.2 billion and hired almost 8,000 hourly workers.

(Read More: Foreign Autos Shut Out the Big 3 in New Report)



When Marchionne took control of Chrysler he openly talked about the company needing to retool and improve production plants that suffered from a lack of investment under previous Chrysler owners.