Chrysler to close Delaware plant

NEWARK, Del. - Chrysler L.L.C. will shut the doors on its sprawling 3.4-million-square-foot manufacturing plant here Dec. 19, cutting the plant's last 1,000 employees, including 900 hourly union members.

Yesterday's announcement - delivered at 6:30 a.m. during a huge, and subdued, town hall meeting at the plant that makes slow-selling SUVs - came as only a partial surprise.

The beleaguered automaker said in February 2007 that it would mothball the facility at the end of 2009.

"We had been expecting this at some point in time," said Duane Ashley, 55, of Newark, who had worked at the plant since 1980. And given the state of the economy, he was not completely surprised. "We're no different from any other place in America."

In February 2007, the plant employed 2,100.

People called their families during a short break that followed the meeting, said Donna Branch-Jones, 43, an assembly-line worker who builds car doors.

"It was sad," said Branch-Jones, a 15-year employee from Middletown, Del. "Some people were being emotional. There were some short tempers. It was a slap in the face to hear it today."

Chrysler also said it would cut back to one shift at its Toledo, Ohio, plant, eliminating 825 jobs. Yesterday's announced cuts are about 6 percent of Chrysler's U.S. hourly workforce of 33,000.

Built in the early 1950s to manufacture tanks, the Newark plant makes the slow-selling Dodge Durango and Chrysler Aspen sport-utility vehicles. Production of the current versions of the Durango and Aspen will end when the plant closes.

"The biggest factor has been the global competition in the marketplace," said Chrysler spokesman Ed Saenz. Also, he said, consumer demand for the Durango and Aspen has slowed because of "higher gas prices and a tight credit market."

Chrysler sold 17,339 Durangos through September, down 54 percent from sales for the first nine months of last year. Aspen sales dropped 21 percent to 17,681. The plant made Durango hybrids, which were selling, but not enough, Saenz said.

Newark Mayor Vance A. Funk 3d said a Chrysler official called him just before Wednesday's Phillies game to tell him the bad news.

Funk said he and other government leaders had met with Chrysler officials, hoping to persuade them to retool the plant to make smaller, more-desirable cars.

"We met privately with the Chrysler people several times, and they were adamant," Funk said. "In fact, they gave us no hope at all."

Chrysler said there were not enough parts suppliers in this region, Funk recalled, making it "totally inefficient to build cars on the East Coast anymore" - a point echoed by Chrysler spokesman Saenz.

Meanwhile, since February 2007, the company and local officials have been working to market the 224-acre property. Among those said to be interested is the adjacent University of Delaware, according to Dina Reider-Hicks, spokeswoman for the Delaware Economic Development Office.

She said officials were trying to attract European or Asian automakers to the plant with its 17 miles of conveyor belts.

In a joint statement, Delaware's congressional delegation - which includes U.S. Sen. Joe Biden, the Democratic vice presidential candidate - expressed disappointment, especially after "the $25 billion that Congress recently approved for auto companies to stem the tide of job losses and plant closures."

The company said it would negotiate severance and early-retirement packages with the union and might be able to offer some workers jobs in other U.S. plants.

United Autoworkers Local 1183 had no official comment, but Samuel E. Lathem, president of the Delaware State Federation of the AFL-CIO, stopped to chat yesterday on his way into the union hall.

A retired Chrysler worker and former leader of the local, Lathem said the union would now focus on helping workers. "We have to train and retrain to get people employed."

Joseph Hypes, 44, of Brookside, Del., a 10-year employee, has already begun taking classes for air-conditioning technicians.

"It's a shame," he said. "Everyone is losing their jobs."

Funk said the plans were to raze buildings on the property when it was sold. Newark will lose $300,000 in property taxes and $20,000 to $30,000 in sewer fees, but will gain an electricity customer because Chrysler does not buy its electricity from Newark.

"In the long run," Funk said, "we'll be better off financially."

Yesterday's news comes as Daimler AG said Chrysler lost $772.5 million, or $660 million, in the second quarter - depending on whether European or U.S. accounting standards are used. The German company owns 19.9 percent of Chrysler.