Chrysler cuts hit Missouri

Chrysler cuts hit Missouri
One St. Louis plant closed; another factory idles shift.

Published Tuesday, July 1, 2008

DETROIT (AP) - Chrysler LLC said yesterday that it will indefinitely close one Missouri plant and cut production at another because of slumping demand for pickup trucks and minivans.

Officials with the Auburn Hills-based automaker said in a conference call that it will shutter the St. Louis South plant, which makes minivans, effective Oct. 31. The St. Louis North plant, which makes full-size pickups, will be cut from two shifts to one effective Sept. 2. Both plants are in Fenton, a St. Louis suburb.

Chrysler said the moves would affect 2,400 jobs. That includes 1,500 at the minivan plant and another 900 at the pickup truck plant.

Chrysler President and Vice Chairman Tom LaSorda said the company has no plans to reopen the minivan plant.

"We see no need for the capacity in the future," he said, adding that demand for minivans can be handled by three shifts at a factory in Windsor, Ontario.

LaSorda also denied rumors that Chrysler’s new owners, Cerberus Capital Management LP, had plans to sell the company in pieces.

"Hogwash, absolutely not being considered at all," he said. "Absolutely no relevance. I don’t even want to entertain those questions."

He would not say whether workers at the pickup truck plant could be recalled, adding that the company never announces an indefinite shift cut "because that is something we cannot foresee."

The company will hold meetings with affected workers to review severance programs, LaSorda said.

LaSorda blamed the moves on a slowing economy, high gasoline prices and a shift in consumer demand from larger vehicles to smaller, more fuel-efficient ones.

He said the private company is meeting or exceeding its financial targets but "this environment is forcing us to make some very difficult decisions."

Vice Chairman and President Jim Press said that despite the cuts, Chrysler remains bullish on the minivan and on pickups. He said there is a market for people who need pickups for work and that minivans are fuel-efficient alternatives to big sport utility vehicles.

"We have to better align the volume with our inventories," he said.

Yesterday’s announcement comes after several plant shutdowns by Chrysler. The company said in a memo sent to workers on Wednesday that it would close the Toledo North Assembly Plant for seven weeks from July 7 through the week of Aug. 18 because of sagging sales. The plant makes the Jeep Liberty and Dodge Nitro midsize sport utility vehicles.

The Newark, Del., Assembly Plant, which makes the Dodge Durango and Chrysler Aspen SUVs, was shut down starting yesterday for five weeks, and the Warren, Mich., truck plant, which makes the Dodge Ram pickup, will close for five weeks in late June and July.

Chrysler’s U.S. sales were off 19 percent in the first five months of the year, with huge drops in larger vehicles that make up most of Chrysler’s lineup.