Chrysler to idle one St. Louis plant, cut shift at another
St. Louis Business Journal by Diana Barr
Date: Monday, June 30, 2008, 2:57pm CDT

Chrysler LLC plans to close its St. Louis South assembly plant indefinitely, effective Oct. 31, and reduce operations at its St. Louis North assembly plant from two shifts to one as of Sept. 2.

Both of the plants are located in Fenton, Mo., in St. Louis County. Fenton Mayor Dennis Hancock confirmed the news Monday afternoon, shortly after Chrysler executives advised the city about the changes and a report appeared in the Wall Street Journal.

Hancock said that Chrysler officials told him the shutdowns were due to the slowdown in the market, and that the moves will affect a total of 2,400 employees.

The St. Louis South plant makes the Dodge Caravan and Chrysler Town & Country minivans, which are also produced at a plant in Windsor, Ontario.

Chrysler had announced in February 2007 it would eliminate the South plant's second shift as part of a three-year nationwide restructuring plan calling for a 16 percent work force reduction by 2009 in an effort to save $4.5 billion. Chrysler confirmed last November that the move would eliminate about 1,078 workers. About 1,500 workers remained at the South plant after the second shift was cut.

The St. Louis North assembly plant, which employs about 2,300, produces Dodge Ram trucks in two shifts.

Hancock said Fenton's next step is to try to digest the news and what it means for the city. "Our thoughts and prayers go out to the 2,400 people affected," he said. "We hope this is short term and that people will start making purchases" of new cars.

"It's obvious that with $4-a-gallon gasoline and a general slowdown in the economy that this is going to happen," he said.

Hancock said that if there's anything to take heart in, it's the fact that the company spent about $500 million to install flex manufacturing equipment in the South plant last year, enabling the plant to switch to production of other vehicles. "We'd hope that as other vehicles go into production, the plant here will be given serious consideration," he said. A similar amount was scheduled to be spent this summer at the North plant, Hancock said, and he hasn't been advised that there will be a change in that schedule.

Aided by $32 million in state incentives, The Chrysler Group announced in December 2005 that it would invest up to $1 billion at its two assembly plants in Fenton over several years.

That was before then-named DaimlerChrysler AG of Germany closed in August 2007 on its $7.4 billion sale of Chrysler Group to Cerberus Capital Management LP , forming Auburn Hills, Mich.-based Chrysler LLC