Wisconsin Goes Ahead on Plan to Sue Chrysler

Gov. Tommy G. Thompson ordered attorneys Friday to go ahead with a lawsuit against Chrysler Corp. but held out hope for a settlement that would preserve jobs at the Kenosha plant the auto maker wants to close.

Thompson said Chrysler does not want a breach of contract suit to be filed over its plan to lay off 5,500 auto workers at the plant in Kenosha, which it acquired when it bought American Motors Corp. last year, and has expressed a willingness to negotiate with the state.

“It would be better for both parties to settle this case quickly,” Thompson said at a news conference.

Thompson said Chrysler Chairman Lee Iacocca telephoned him Tuesday and that a meeting was likely soon between state and company officials. He declined to say where or when it would be held.

‘Clearly Enforceable’

Chrysler announced Jan. 27 it would halt production of the Omni-Horizon autos Sept. 30.

Atty. Gen. Don Hanaway had advised the governor earlier that the state had a “clearly enforceable” agreement with Chrysler calling for Omni-Horizon autos to be built in Kenosha for five years.

At a news conference in New York last week, Iacocca defended his company’s decision to close the aging Kenosha plant. “We did not lie to anybody,” he said. “Why would we?”

Hanaway said the state has a “good faith basis” for filing the suit. And even though no contract with Chrysler was signed, “I don’t consider this to be frivolous in any way,” he said.

In Chicago, Chrysler Motors Chairman Gerald Greenwald said company officials were sorry the Kenosha plant had to be closed.