Chrysler to Cancel Its Omni, Horizon Models
Chrysler Corp. said today it will halt production of the Dodge Omni/Plymouth Horizon in February, ending the No. 3 auto maker’s long struggle to make a subcompact car to compete with foreign models at the low end of the market.
The company also said it is temporarily closing the Jefferson Avenue Detroit plant that makes the car as part of a broad-based cost-cutting campaign.
Citing intense competition and a deteriorating U.S. market, it also said it would cut another assembly plant in Fenton, Mo., to one shift a day and close an Acustar parts operation in Coleman, Wis. About 4,000 workers will be affected.
The company said these and other planned measures are due to a continued deterioration of the U.S. market and intense competition.
The Omni/Horizon was launched 12 years ago as Detroit’s response to an oil crisis which made gasoline much more expensive. The car met with moderate success in terms of sales but was plagued from the start by consumer complaints.
An improved model later managed to hold its own when demand for small cars was strong in the early 1980s.
But more recently low-end competition increased from car makers such as South Korea’s Hyundai and Japan’s Nissan, while demand in the market sector remained flat with oil prices declining.
For Chrysler, a gradual decline in sales of the Omni/Horizon gained momentum over the last year.
Sales of the subcompacts have been falling since 1986, when Chrysler sold 208,000 of them. This year, sales are projected at 89,500, it said.
Chrysler said production on the cars will end Feb. 2. It cited the declining sales as well as continued shifts in the market into mid-size, full-size and large cars.
At the Jefferson Avenue plant, the 1,700 laid off hourly employees will begin to be called back in the fall of 1991 when training begins for a new Jefferson assembly plant.
Chrysler said the new Jefferson plant will start production in January, 1992, producing what it defined as “two totally new, upscale sport utility vehicles.”
With the phasing out of the Omni/Horizon, Chrysler said it will shift its marketing emphasis to the compact Dodge Shadow/Plymouth Sundance models.
The Fenton, Mo., plant will go to a single shift in the first quarter of 1990. The plant, which now operates two production shifts and assembles 912 vehicles a day, produces the LeBaron sports coupe and convertible and the Dodge Daytona car.
In 1988, Chrysler closed its plant in Kenosha, Wis., idling 5,500 workers. Chrysler currently operates eight assembly plants in the United States and four in Canada.
