Chrysler plans to close 8 plants in bankruptcy

THE CHRYSLER BANKRUPTCY


Jesse Snyder

Automotive News | May 1, 2009 – 1:06 pm EST

 

Chrysler plans to close 8 plants in bankruptcy
 

‘We don’t consider this is over,’ UAW official says

DETROIT — Chrysler plans to close eight U.S. plants by December 2010, including five assembly operations, according to documents filed in U.S. Bankruptcy Court in New York.

But Chrysler expects its pending alliance with Fiat S.p.A. to allow it “to retain substantially all our employees,” Chrysler spokeswoman Dianna Gutierrez said today. “And any employee displaced by the bankruptcy will be given an opportunity at other Chrysler facilities.”

Chrysler expects the envisioned alliance with Fiat, which is subject to modification by the bankruptcy court, to add about 5,000 employees, she said. She did not specify when.

Of the facilities on the closing list, three are component plants: Detroit Axle, Twinsburg Stamping in Ohio and Kenosha Engine in Wisconsin.

Two of the assembly plants — St. Louis South and Newark, Del. — already are idled.

But closing three other assembly plants — Sterling Heights, Mich., Conner Avenue in Detroit and St. Louis North — would eliminate Chrysler manufacturing in Missouri and reduce it substantially in southeastern Michigan.

Chrysler said current employees would be offered employment in the new company.

In a statement, Chrysler added: “It is premature to speculate on the ultimate disposition of those facilities that are to remain with Chrysler, [for example], sale as an operating asset to another company, sale to a new business, redevelopment, closure or other possible outcomes.”

Chrysler did not tell workers at the affected plants about the plans outlined in Manzo’s document, said a UAW official who declined to be identified.

“We don’t consider this is over,” the UAW official. “We’ll be fighting to keep our plant open.”

Plant closings
Chrysler will close eight North American plants, according to its bankruptcy petition:
• Sterling Heights (Mich.) Assembly Plant
• Detroit (Mich.) Axle
• Conner Avenue (Detroit) Assembly
• St. Louis (Mo.) North Plant
• Kenosha (Wisc.) Engine
• Twinsburg (Ohio) Stamping Plant
• An idled plant in Newark, Del.
• An idled plant in south St. Louis

 

Preliminary draft

The plans were contained in a bankruptcy petition prepared by Robert Manzo, executive director of Capstone Advisory Group, one of Chrysler’s advisers. Although labeled as a preliminary draft, Manzo’s Section 363 filing laid out Chrysler’s plans to split itself into two legal entities: an “OldCo” that would retain these eight plants and other liabilities not in Chrysler’s future; and a “NewCo” that would be the basis of the slimmer and more competitive Chrysler that would emerge from bankruptcy reorganization.

Sterling Heights is the only production site for the Chrysler Sebring and Dodge Avenger.

St. Louis North builds the Dodge Ram 1500 light-duty pickup and the heavy-duty Ram 2500. But Chrysler’s Warren Truck plant in Warren, Mich., also builds the Ram 1500 plus the Dodge Dakota mid-sized pickup.

Conner Avenue is a low-volume plant that builds the Dodge Viper sports car. Chrysler has been trying to sell the plant and the rights to produce the Viper to another manufacturer since December.

Manzo said a 10-person team from Capstone has been working at Chrysler headquarters in Auburn Hills, Mich., since November and has consulted regularly with CEO Bob Nardelli and his senior staff to prepare the plan.

The plan would transfer 10 assembly plants to the NewCo for long-term operations.

That would include the Toluca and Saltillo plants in Mexico and the Brampton and Windsor plants in Ontario. Six plants would be in the United States: Toledo North and Toledo Supplier Park in Ohio, Warren Truck and Jefferson Avenue in Michigan, Belvidere in Illinois and the Dodge Sprinter van operation in Ladson, S.C.


 

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