BY JOHN KREROWICZ
jkrerowicz@kenoshanews.com

Local and state officials, including Wisconsin Gov. Jim Doyle, responded angrily to Chrysler’s bankruptcy plan to shutter the Kenosha Engine Plant by the end of next year. Some said they are not ready to let the plant close without a fight.

Doyle said the Kenosha closure is contrary to what Chrysler had been telling the state all along, and John Drew, a regional UAW officer, said the union will work to keep the Kenosha facility open.

UAW Local 72 has scheduled a 5 p.m. Monday press conference at its headquarters, 3615 Washington Road.

Doyle said he was upset that the automaker wanted to put the reported 580 hourly and 85 salaried employees at the Kenosha plant out of work while having factories in Michigan and Mexico build the new Phoenix engine. Kenosha was third on the list to possibly build that engine.

Advertisement

“Now we find out through the news media that they may be shipping Wisconsin’s jobs to Mexico,” he said in a prepared statement. “This is outrageous. Wisconsin workers are willing to invest their hard-earned tax dollars to help save Chrysler, but it is unfair to ask those same workers to sacrifice their jobs to save a foreign plant making the same exact product.”

UAW members this week voted to accept contract changes aimed at helping the company save money and qualify for federal loans to stay in business. However, some debtors balked at concessions required of them to get those loans, and that led Chrysler to file for Chapter 11 bankruptcy protection in New York on Thursday.

One of the documents filed in bankruptcy court listed the Kenosha Engine Plant as one of the plants Chrysler plans to close.

The plan was met with negative responses from Kenosha-area officials.

“It’s horrible news for our community,” State Sen. Bob Wirch, D-Pleasant Prairie, said. “You’re taking a lot of good, high-paying jobs out of the local area.”

Kenosha County Executive Jim Kreuser said Friday’s announcement was “extremely disappointing,” especially as Chrysler was receiving federal aid.

“Giving money to a company that is putting Kenosha residents out of work while sending jobs to Mexico is sending the wrong message,” Kreuser said.

U.S. Rep. Paul Ryan, R-Wis., also issued a statement about the announcement, which he called “gut-wrenching news.”

“I am shocked, surprised and deeply disappointed by today’s news,” Ryan said. “From my conversations that took place with Chrysler executives this year and as early as Wednesday evening, I had been given assurances that this would not occur.”

Chrysler’s engine plant in Kenosha will be one of eight factories to close permanently, as outlined in bankruptcy papers, company officials confirmed Friday morning. The company reportedly wants to sell the eight facilities and some $2.3 billion of equipment to pay off debt.

The bankruptcy plan to close the facilities still must be reviewed and approved by the courts.

The plan suggested, but the company had not confirmed, that the Kenosha plant, with a net book value of $397 million listed in court papers, would be leased from Chrysler to the new company that would emerge from bankruptcy proceedings. The “new Chrysler” would then close them by December 2010. Reports indicate that Kenosha’s plant could close by October 2010.

Employees from all eight plants would be offered jobs at other company facilities, said Max Gates, Chrysler spokesman.

“All of the employees would be retained and moved to the new company that emerges from bankruptcy,” Gates said.

The Kenosha factory will temporarily close, as will all Chrysler manufacturing sites, starting at least by Monday and reopen when the bankruptcy case is resolved, possibly within 30 to 60 days, Gates said. Some plants closed on Thursday when suppliers stopped delivering parts because they were worried they wouldn’t get paid, reports said.

Manufacturing would resume after the temporary closure, he said.

Reports said some 20,000 hourly workers would be put on temporary layoff and be paid 80 percent of their take-home pay during the shutdown starting Monday.

Chrysler’s employee buyout program has been extended to May 25, so that will affect the number of Kenosha engine plant workers who would lose their jobs here, Gates said.

Gates said the company’s goal was to reduce its workforce by 3,000 by the end of this year. “We anticipate the buyout program will achieve that goal,” he said.

Other facilities to close under the bankruptcy plan are: St. Louis north and south assembly plants, Fenton, Mo.; Twinsburg, Ohio stamping; Newark, Del. assembly; Sterling Heights, Ohio, assembly; Detroit Axle and Conner assembly in Detroit.

One Local 72 member who requested anonymity said he and other first-shift workers at the Kenosha plant were told to work a half-day each on Thursday and Friday. The reason, apparently, was that parts were available to build only 560 engines as opposed to approximately 800 daily.

The member said some second-shift workers also were told not to report to the Kenosha plant both days.

Working less on those days didn’t seem out of the ordinary given the long-term shutdown that begins Monday, he said.

Whether the approved contract changes are implemented now that bankruptcy has been filed was an unresolved question for workers, the employee said.

“Do we even have a contract?” he wondered. “I am curious.”

Chrysler officials were uncertain about the status of the contract.