Chrysler Delays Wis. Plant Closing in Victory for UAW : Won’t Shut Factory This Year
In a victory for the United Auto Workers, Chrysler Corp. said today that it will delay closing its 5,500-worker assembly plant in Kenosha, Wis., and will produce its K-car in the United States during the car’s phase-out.
The No. 3 auto maker had planned to move the Omni-Horizon small car in July from the Kenosha plant to Detroit’s Jefferson Avenue assembly plant, shifting production of the K-car from the Detroit plant and a plant in Newark, Del., to Mexico.
The announcement came after the UAW threatened to scrap early talks aimed at implementing an industry-pattern contract established last fall at General Motors and Ford.
The early talks were also designed to cool tempers over the Kenosha closing and Chrysler’s failed attempt to sell its 28,000-worker Acustar Inc. parts subsidiary.
The Kenosha plant had been scheduled for a probable fall closing, after the current model run for the rear-wheel-drive Dodge Diplomat, Plymouth Grand Fury and Chrysler Fifth Avenue. But the plant’s workers will now be employed through the end of the year.
The announcement of the reprieve for the Kenosha plant was hailed today by Wisconsin officials, who said Chrysler’s decision will buy the area valuable time to create new jobs.
‘Will Only Delay Closing’
But Chrysler Chairman Lee A. Iacocca said at a morning news conference: “I do not want any more misunderstandings about Kenosha. It will only delay the closing. . . . It will keep a full work force on through year’s end, and that’s it.”
K-car plant production will continue at Detroit and Delaware plants until 1989 orders are filled, Iacocca said. He said that if 20,000 to 40,000 more K-cars are needed before phase-out, that production will take place in January in Mexico.
As scheduled, the Newark plant will be converted to production of a K-car replacement by early fall, Chrysler said.
Chrysler attributed the decisions on Kenosha and K-car production to better-than-expected sales of all cars in the first quarter and to success in marketing the Dodge Aries and Plymouth Reliant, along with the Omni-Horizon, as “America” vehicles.
Under the America program, Chrysler has cut prices and added standard equipment on aging vehicles to boost sales.
Chrysler announced first quarter profits of $183.7 million, down 31.8% from $269.4 million in the first quarter of 1987.
‘Our Sales Sizzled’
“The first quarter was our best in 15 years at Chrysler. Our sales sizzled,” Iacocca said in a statement. He said several of the company’s cars and trucks had record sales in the first quarter.
Chrysler also said Omni-Horizon sales jumped 80% from December to the beginning of April, while sales of the Aries and Reliant rose 153% after their inclusion in the America program.
Iacocca said Chrysler plans to increase production of cars and trucks by 110,000 vehicles in the second half of 1988.
UAW officials were not immediately available for comment.
