Chrysler closing hurts people, businesses, city
Reductions at Chrysler's Fenton plant cou
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| Erica Burrus photo/ Stratford Inn Bar and Grill bartender Crystal Wiseman and Stratford Inn co-owner Mike Scauzzo will miss the Chrysler plant workers who frequent their establishment. |
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All of which makes assembly workers, city officials and near-by businesses fear the worst.
The auto maker announced June 30 it would stop production at its mini-van assembly plant in October and reduce the workforce at its pick-up truck plant in September.The reductions would mean a loss of about 2,400 jobs overall, said Tom LaSorda, Chrysler's president and vice chairman. LaSorda made the announcement during an afternoon teleconference with reporters nationwide.
LaSorda lagging sales of pickups and minivans made the decision a necessity.
Crystal Wiseman, the daytime bartender at the Stratford Inn, in the 800 block of South Highway Drive and just across Interstate 44 from the assembly plant, said it will be sad to lose those who she and several fellow employees call family.
"People will still come here and drink but I feel sorry for the workers," she said. "I've been here for five years and I'm afraid it will be a little quieter around here, with not as many people. The Chrysler people are kind of our bread and butter and they've been coming in here for a long time, so it will be sad to see them go.
"We all love the people that work over there and it's kind of been like a family."
Mike Scauzzo, a co-owner of the Stratford Inn, has been busily remodeling, adding a huge ballroom and other projects. Musical entertainment, west coast swing and country dancing lessons, sand volleyball leagues all week long will help fend off the effects of the assembly plant's closing, he said.
"We were always optimistic things would return to normal and that things would change," he said. "It's sad to see all those good people lose their jobs. I guess it's just another big business leaving the St. Louis area."
Scauzzo says his restaurant does a lot of business with Chrysler workers during the week.
"We do a lot of to-go orders with Chrysler workers, all during the week, so yeah, if they're not there I'm sure we won't be needing as many to-go containers," he said. "We do as many as 300 to-go orders on a good day and when we have a (chicken) wing day, I'll do 1,500 pounds of wings, over a half-ton. Hopefully things will change. I think we'll be able to weather it better than a lot of the other places around here."
Chrysler employees said the future is murky.
"I just got the news yesterday and all I know is wait and see," said a 25-year Chrysler worker while sitting at the Stratford last week. "Everybody's just wondering what's going to happen.
"It's the young people I feel sorry for," he said. "I got most of my time in, but the ones that only have 10 or 15 years, what's going to happen to them? There should be a buyout for the more senior employees, but all we can do is just wait."
The United Auto Workers contract with Chrysler calls for enhanced unemployment compensation for those laid off and an eventual return to company payroll.
Union officials from both United Auto Workers Locals 110 and 136 said they did not have enough information to comment on the reductions and what they could do in the future for its membership.
Miguel Escamilla, owner of the La Plaza Mexican Restaurant, in the 800 block of South Highway Drive, said the shut down will effect his business in a big way.
"About a 10 percent loss," he said. "That's sit-down dining and to-go orders. I don't know how I will make that up, but when you sign the lease you have to do something."
Tim Lacey, manager of the Cracker Barrel restaurant in the 1000 block of South Highway Drive, said he expects to feel the pinch.
"It will probably hurt us a little bit with our to-go sales," Lacey said, "which we do a lot of with them."
Fenton Mayor Dennis Hancock said he got the news just minutes before Chrysler officials held their teleconference with reporters "so I didn't get any advanced notice at all."
Hancock said the Fenton assembly plant was chosen because Chrysler felt it made more sense from a business perspective to operate three full shifts at the Windsor, Ontario, Canada, plant than one shift at Fenton.
The effect on the city's business is measurable to a point, he added, and the city estimates it will lose about $700,000 in combined utility taxes and sales taxes on utilities.
Potential sales tax losses from area businesses near the assembly plant are more difficult to calculate, Hancock said.
"It's going to be hard to quantify right now because with the economy in general, things are pretty slow," he said. "We've seen a little bit of a downturn in sales tax revenue already so it's going to be hard to quantify if anything forward from this point will be attributable to this one particular action.
Hancock said most of the Chrysler plant workers do not live in Fenton, which he thinks might make it slightly less painful from the city government's perspective.
"We're thinking we're not going to see as much of an impact as the entire region because it's going to be spread out," Hancock said.
Figures released last week show Chrysler's sales of full-sized pickup trucks were down 25 percent over last year's numbers, Hancock said.
"We all know what kind of shape the economy is in and I can't say we're surprised by this," he said. "It's become clear they can't continue to crank out vehicles that they can't sell. That's kind of the nature of the automotive industry, so the only way they can curtail production is stop production.
"That's the decision they've made and we're certainly disappointed they chose to do it in Fenton," Hancock said. " Our hearts go out to those 2,400 workers and their families who are at risk here."
Chrysler officials plan to meet with the city over the next couple weeks, Hancock said, to discuss what the plant's closing means and what plans can be made the help down the line.
"The one thing I want to stress is these 2,400 workers, they're not jobs, they're people. We want to make sure that everybody keeps those people in their thoughts and prayer," Hancock said.
In 2005 the city approved $24 million in tax abatements for Daimler-Chrysler in exchange for the auto maker investing almost $1 billion in its two Fenton assembly plants.
Chrysler was to install new equipment in both the North plant, where pick-up trucks are assembled, and the South plant, where the mini-vans are assembled. The change would turn the lines into flex lines, where the auto maker could change over to manufacturing different vehicle models on short notice.
The deal gave the company a tax abatement of 70 percent on the property taxes it would normally pay on new equipment and machinery, and Hancock said "as long they make the investment they get the tax benefits from that."
"They've already made a half-billion investment in the South plant and that equipment is already in place," he said. "The North plant is scheduled to be changed over this summer and we haven't heard anything that would indicate to me that they are not planning to move ahead to do that. As long as the equipment stays there (in the South plant) then they'll pay the property taxes on it."
