Chrysler bankruptcy filing seeks end of Fenton facility
This article first appeared in the St. Louis Beacon, May 1, 2009 - One line in the stack of documents filed by Chrysler Corp. in its bankruptcy case caused a lot of anguish and confusion in Fenton on Friday.
There, on page 45 of Exhibit 52 , item 12, came the news that snuck up on the autoworkers union, Mayor Dennis Hancock and others who have suffered with the ups and downs of the Chrysler assembly plants in recent years.
"The following facilities are currently scheduled to be closed by December 2010 and will remain in OLDCO, leased to NEWCO," the filing said, followed by a list of eight plants, including both the north and the south facilities in Fenton. Before taking effect, the plan would have to be approved by a judge.
The south plant, which had produced minivans, has been idle since last year, and the north plant's production of pickups has been cut back. But seeing them listed in the court documents, amid the legal jargon of OLDCO -- the current Chrysler corporation -- and NEWCO, whatever successor firm emerges from bankruptcy, brought home the truth with a jolt, like a flat tire on Interstate 44.
And if anyone needed any more reminders of the rough road the industry is traveling, a weathered sign on the empty parking lot at the south plant was a harsh reminder. Featuring an American flag, it read: SECURE YOUR FUTURE. BUY AMERICAN.
That message hit home at the United Auto Workers Local 136 union hall, across the highway from the Chrysler complex. There, workers were puzzled and dispirited and in no mood to talk to anyone whose Japanese car was a jarring note among the smattering of vehicles with nameplates like Dakota, Stratus, Sebring and Durango.
Reached by phone later, Local President Jerry Dennison said as far as he knew, the plant was on a temporary shutdown, and any further information had to come from Detroit. "I just don't know what's going on," he said. "That's all I've got to say, brother."
Outside the plant, workers emerging with written notices from Chrysler had no more to say. "We're laid off," one said before heading to the union hall. "We hear it's for 30 to 60 days."
Comment from Detroit
Calls to Detroit brought comment from Dianna Guiterrez and Shawn Morgan of the Chrysler public relations staff.
Guiterrez emphasized that it is premature to speculate on the ultimate fate of the Fenton plants because the plan submitted by Chrysler to the bankruptcy court still has to be approved. Both women pointed out that though the plants may be closed and sold, Chrysler workers will have the opportunity to transfer to other facilities that remain open.
A statement released by Morgan Friday afternoon said:
"The assets and liabilities that are not needed to support the business plan developed by Fiat and Chrysler for the new company will remain with the old company and move through the Chapter 11 process for disposition. A list of assets which have been identified for disposition was included in initial court filings.
"An important point regarding employees is that, while some facilities may eventually close, none other than Newark and St. Louis South are scheduled for closure in the near term. Virtually all labor associated with these facilities will be offered employment with the new company. In addition, as previously indicated, we expect that the alliance with Fiat will help to preserve and create in excess of 5,000 manufacturing jobs.
"It is premature to speculate on the ultimate disposition of those facilities that are to remain with Chrysler, e.g., sale as an operating asset to another company, sale to a new business, redevelopment, closure or other possible outcomes."
She said developments surrounding the bankruptcy filing will be updated at the website www.chryslerrestructuring.com .
Mayor Was Surprised
If workers in Fenton were to take jobs at other facilities, Dennis Hancock, mayor of the city that they would leave behind, said he was "still trying to digest it all." He said he had been on a conference call on Thursday with Chrysler executives along with government officials, and the topic of a possible shutdown of the plant had not come up.
"I don't know that I feel blindsided," Hancock said. "But I think the information coming out this morning is a little different from the information we had yesterday.
"There was no talk of plants closing as part of the bankruptcy. We were told that the plants that were operating as they went into bankruptcy would be shut down for 30 to 60 days, and as the company emerged from bankruptcy, production would resume."
He said the fact that the timeline sets the closing at the end of 2010 may provide some relief in terms of finding a new use for the complex, or at least for the land it sits on. He said Fenton's tax structure and the geographic location of the St. Louis area in general make the site attractive.
"I'm not sure what the market would be for the facility itself," Hancock said. "But the property is probably extremely valuable, given where it's located.
"Given the state of the commercial real estate market, I imagine it would be a pretty tough sell. But since they're not planning on closing until the end of next year, maybe the market will have recovered by then."
As far as the impact on the city, Hancock said Fenton has already dealt with the loss of a lot of the jobs at the Chrysler facilities and the economic losses that occurred as a result.
"We have tried over the past several years as part of our economic development efforts to lessen our dependency on the automotive industry," he said. "We've been pretty successful at doing that. Now, it's less than 5 percent of our total budget."
Sen. Christopher Bond, R-Mo., who had worked to get federal money to improve infrastructure in Fenton, criticized the planned closure, saying in a statement:
“Fenton workers, the Fenton community, and the state of Missouri have been let down by the Obama Administration and Chrysler. This is devastating news for the hard working families that depend on Chrysler for their livelihoods. It is critical that all of us – federal, state and local partners – work together to keep the jobs we have and bring new ones to our communities.”
Rep. Todd Akin, the Republican whose district includes the plant site, had also not been given any advance notice of the plants' precarious position, his spokesman Steve Taylor said Friday. "This is all pretty new and fresh," he said, noting that Akin had spoken with Chrysler representatives recently. "He and the rest of the delegation will be exploring the issue."
The impact is being felt at nearby businesses. At the Cracker Barrel Old Country Store, where a 60-percent-off porch sale began Friday morning, changing work patterns at Chrysler were noticeable quickly, as a lot of restaurant regulars stopped coming by after their shift was over.
Assistant manager Rose Mesnier noted that business is down, though that may be because of the economy in general as much as it is fallout from the Chrysler plant. She said that the segment of their business that includes travelers along I-44, on the way to or from Branson or Six Flags, has remained steady.
"We have people who go from Cracker Barrel to Cracker Barrel, from town to town," she said.