Auburn Hills, Michigan – Chrysler will close five plants in the U.S. as part of its restructuring program. The company said that it did not previously announce the closings because it did not know if its viability plan, which included the closings, would be approved by the U.S. Treasury and the President’s Auto Task Force.
Chrysler said that the closings are based on a continued volume deterioration trends, and address significant declines in the Seasonally Adjusted Annual Rate (SAAR) of auto sales, from 15.6 million in January 2008 to 9.8 million in January 2009.
Sterling Heights Assembly Plant and Kenosha Engine will be idled in December 2010, due to a severe decline in demand and a resulting reduction in volume. Detroit Axle will also be idled in December 2010, with its required work moved to a new facility that is being developed in nearby Marysville, Michigan.
Twinsburg Stamping will have its existing volume transferred to Warren Stamping and Sterling Stamping plants, effective March 2010. Connor Avenue Assembly Plant has been for sale since 2008 and is scheduled to idle in December 2009.
Due to volume reduction in the truck segment, RamBox production will be moved from the St. Louis North Assembly Plant to Warren Truck Assembly Plant in the third quarter of 2009.
The closings follow those of Newark Assembly Plant, which was closed in December 2008, and St. Louis South Assembly Plant, closed in October 2008.
Chrysler said that most of its manufacturing operations have been temporarily idled to reduce dealer inventory and it is part of the restructuring process, but is not the result of the bankruptcy filing. The company expects that most workers will be back on the job following the bankruptcy proceedings and the formation of the new company. It is expected that virtually all employees in these facilities will be offered employment with the new company.
A second shift of 1,200 jobs is scheduled to be added to the Jefferson North Assembly Plant, which will build the all-new Jeep Grand Cherokee.