Chrysler Factory Has Been Teetering on Edge for Years : Kenosha Takes It in Stride as Oldest Auto Plant Closes

The last maroon Dodge Diplomat rolled off the assembly line around noon and more than 5,000 workers officially lost their jobs Wednesday at what had been the oldest continuously operating auto plant in the country.

Silence descended on the rickety turn-of-the-century Chrysler factory--the heart of a town that for 86 years came to symbolize inventive and often eccentric cars from the one cylinder Jeffery to the Nash Rambler and the stubby AMC Pacer.

Chrysler, which bought American Motors last year, plans to keep 1,200 other workers on the payroll at a nearby engine plant.

For many of the 77,000 residents of this gritty lunch-pail community midway between Chicago and Milwaukee on the shores of Lake Michigan, it is not a wonderful life this holiday season, and no guardian angel is coming to the rescue.

“They handed us all a little letter that told us how much they appreciated us,” said repairman William Combs, 34, as he left work for the last time after 18 years. “Sort of a pat on the back and a kick in the butt.”

Instead of queuing for year-end bonuses, Combs will join hundreds of his colleagues who have already begun lining up at a makeshift unemployment center to apply for jobless benefits.

Despite the gloom, there is also a sense here that things could have been much worse. The multibuilding factory complex, rendered inefficient by age, a jury-rigged layout and high labor costs, has been teetering on the edge for years under a succession of owners, a slave to the up-and-down fortunes of the domestic auto industry.

Bitter workers say they were double-crossed by Chrysler Chairman Lee A. Iacocca, who pledged when his firm bought American Motors in 1987 to keep the plant running for at least five years. In January, however, Iacocca announced plans for a shutdown, which was delayed as authorities threatened lawsuits.

Much to the dismay of employees, no suits were ever filed, because state and local government officials concluded that legal action against Chrysler would probably prove fruitless and would only scare off new investors.

But the result was an 11-month reprieve that helped cushion the shock. And, by the time it came, organized labor and Wisconsin politicians had pressured the corporation into providing a severance package worth more than $220 million in cash and benefits to laid-off workers--the equivalent of more than $40,000 per worker, although individual payments vary according to pay rate and length of service. The settlement makes it the costliest plant closing in auto history, according to both union and company spokesmen.

There is little joy over the shutdown, of course, and the union has commissioned a study that contends the loss of Chrysler will cost the region $209 million over the next few years, as a result of cuts in tax revenues and the need for higher social welfare spending.

But local officials and businessmen minimize the impact, arguing that the community was already moving to wean itself from economic dependence on its largest employer.

The local economy, although expected to sag in coming months as the severance benefits run dry, has never been stronger. Unemployment stood at only 3.5% before the shutdown, well below the national average.

Light industry is rapidly moving up from Illinois to take advantage of lower tax rates and property costs. So are Chicago area commuters, who are gobbling up real estate so fast that developers like Doug Stanich have broken ground on new condominium and housing projects despite the Chrysler developments. County officials estimate that property values in the area have actually risen an average of 5% over the last year, despite the uncertainty over Chrysler.

“Sooner or later, it was going to happen to us,” said Kenosha city spokesman Armando Bras. “ . . . Now we can shed our image as a one-company town. We’re shifting from a more blue-collar to a white-collar community.”

Lion’s Share of Attention

The Kenosha plant is actually one of five manufacturing facilities being phased out by Chrysler on the eve of Christmas, but it has received the lion’s share of attention not only because it is the largest but because of its special place in automotive history.

Originally a bicycle factory, the main Kenosha plant was vacant when Thomas B. Jeffery came to town to produce cars in 1900. In 1902, the first Rambler Model C rolled off the Kenosha assembly line, a year before Henry Ford began mass-producing his Model T.

Over the years, the facility grew, eventually expanding into an old sofa bed factory as well as other buildings. The parent firm changed ownership as well as names, going from Jeffery, to Nash to American Motors. Nearly a decade before the Chrysler takeover, AMC had come under the control of Renault, the French auto maker.

On average, Kenosha workers were some of the best paid in the auto industry, thanks to a union local long recognized as one of the most militant arms of the United Auto Workers. But those lucrative contracts may have contributed to the plant’s demise. Employment had dwindled from a peak of more than 16,000 in the early 1970s.

Proud to the end, the highly skilled Kenosha work force continued to break Chrysler assembly line quality records right through the final months of operation. And, despite uncertainty about their future, workers seemed determined not to be maudlin.

“I’d love to have a job for Christmas, but I ain’t going to cry about it,” said Mike Mansfield, 28, as he nursed a beer at a bar across from the main gate.

At Freddie’s tavern next door, “Grandma got run over by a reindeer” was blaring from the jukebox as owner Freddie Kauzorich marveled at the festive mood of his clientele. “They’ve sure been partying a lot the last few days,” Kauzorich said. “You’d never know they were losing their jobs. They’re going out in style.”

Researcher Tracy Shryer in Chicago contributed to this story.