Plants Closed or Sold After The Daimler-Benz Takeover of Chrysler

Cerberus plant closings

The St. Louis minivan plant closed October 31, 2008, shifting production to the Windsor, Ontario minivan plant.

Sterling Heights, where the Avenger and Sebring are made, is an advanced flexible manufacturing plant whose fate has been discussed recently given slow sales of those sedans and underutilization of both Sterling Heights and Belvidere. The mystery of its continued existence was resolved by the Fiat deal.

Mike V. wrote on October 10:

First we hear rumors of takeovers by Nissan at Sterling Heights. Then we hear of plant managers no longer working at Sterling Heights. Then paint shop construction being stopped is brought up. Now many of the Challenger guys have noticed that LX/LY cars are no longer being shipped to Sterling Heights to be loaded on rail cars, instead they are going to Windsor.

On May 1, 2009, the rumors came to a climax when Chrysler disclosed in court papers that it would close Sterling Heights by December 2010.

The new axle plant in Marysville, Michigan (around 50 miles from Detroit) will open in 2010, but Chrysler is already trying to sell it. It appears that reputable supplier ZF will end up owning and operating the plant using Chrysler employees; a plant worker noted that shoudl be a great improvement. “Every six months to twelve months we have the same problems because management stays the same and they really are just tossed into a department without fully understanding what is really going on. The managers of old came from the floor and knew the processes. The majority of the ones in the plant now were green when they arrived and are green five years later.”

• The Newark Durango plant was closed in December 2008 after Durango/Aspen sales plummeted.

Conner Avenue (the Viper plant) will either be closed or sold.

Daimler closings

The “deep pockets” of Mercedes became far too deep to find any cash in after billions were extracted from Chrysler, leaving nothing left to weather downturns.

Chrysler was healthy until being taken over by Daimler-Benz, which entailed having Chrysler Financial — a key profit-maker — removed, all automotive designs in progress stopped for two years to let Mercedes engineers and executives make unnecessary changes, paying massive royalties and consulting fees to Mercedes, and other actions that almost made plant closures inevitable. In 2006, Chrysler announced its intention to import a small car, most likely from Chery of China, which would further reduce the American plant count - even as Toyota, Hyundai/Kia, and Honda build new plants in the US. The way to grow a tree is not by clipping its roots.

Chrysler had, as of 2005, slowed its closings and sales and started to invest in flexible manufacturing at existing plants. A new unionized engine plant was also recently opened in Michigan to build the "world engine." However, in 2006, when Joe Eberhardt’s new sales bank was discovered, the shutdown of at least one and possibly two more plants became, again, inevitable - at least with the current “move forward by cutting costs, not by investing” philosophy.

A listing of Chrysler plant closings and sales

Additions: 2008

• A running list of Cerberus plant closings is at our main factories page.

Additions: 2007

• The Newark, Delaware assembly plant is slated for closure in 2009. The idea of moving the PT Cruiser line to Newark has not even been mentioned as a possibility.
• New small cars will be built in China.
• Electric cars will be imported from India and sold by GEM.
• The Conner Avenue plant that makes Vipers is slated for closure; Viper production will be ended or moved or subcontracted (possibly to McLaren, which worked on the engine design).
• The Plymouth Road Office Complex — making Kelvinator refrigerators in 1926, home of Nash and then AMC from 1937 through 1987, and home of JTE (Jeep and Truck Engineering) — was listed for sale in 2007 but as of the end of 2008, has not yet been sold.

Additions: 2005

• Ontario foundry saved by CAW negotiation
• Sept.30, 2005: Indianapolis Foundry shut down. As of November 2006, it has been demolished, leaving nothing but a huge slab of concrete.

Additions: 2004

• More of New Process Gear sold to Magna International, which as of 2007 owned 80% of New Process Gear
• Windsor B-Van plant dismantled (see 2003 for closing)

Additions: 2003

• Most of the rumors or predictions were correct.
• Mt. Elliott Tool and Die is closing, with 290 hourly workers.
• Chrysler Transport, with 549 workers moving parts and materials between plants, will be sold or closed.
• The UAW negotiated payouts - retiring workers will get up to $50,000 plus a car voucher, those who continue working will receive up to $100,000 based on their service, those who transfer from sold or closed plants to other facilities will get $25,000 for relocation. It isn't quite as generous as it sounds but is far better for workers than the non-union alternative (nothing).
• McGraw Glass is closing as we predicted, with 30-year employees getting $50,000 in cash and a voucher for $20,000 towards a Chrysler vehicle. Those with 23-29 years will get $35,000 and retirement benefits. Those 55 and older with 10 years' tenture will get full retirement benefits.
• New Process Gear in Syracuse, which makes transfer cases, has already been sold to Austrian Magna Steyr, with Chrysler retaining 38%. Workers will receive Chrysler-level wages and benefits for eight years. New Process Gear makes transmissions for GM, Chrysler, and others.
• New Castle, Indiana's parts plant is being sold to Metaldyne, with workers getting lower wages or trasnferring elsewhere. Only 220 workers are staying, 300 are retiring, and 700 are moving, many going 70 miles to Kokomo's transmission plant. Those who stay can get up to $100,000 based on their time in the plant. Relocators get $25,000.
• Huntsville's electronics plant is going to German Siemens VDO, with workers getting Chrysler-level wages and benefits for eight years.
• Indianapolis' foundry, which builds engine blocks, is closing in the next four years. (Closed, Sept.30, 2005.)
• Toledo Machining and Forge and Detroit Axle are also closing.
• The Windsor, Ontario van plant that was supposedly saved by an agreement with the CAW is officially dead and buried, with a new van plant being built in Pooler, Georgia to replace it.

2002

• The Graz, Austria minivan, PT Cruiser, and Jeep factory was sold to Magna. This flexible factory was Chrysler's key supplier for Europe.
• The air-conditioning parts plant in Dayton, Ohio, was sold to Germany's Behr.
• The Ajax seat-back cover plant is closing next year.
• The award-winning (for high quality) Huntsville plant is in the process of being sold as Chrysler is converted to the Mercedes and Mitsubishi electronic architectures.
• DaimlerChrysler Aviation, Chrysler's in-house airline, was sold to Edsel B. Ford II.
• Metaldyne will have the option of taking over the New Castle driveline and chassis component factory, which is currently a joint venture with DCX (due to a union contract it cannot be sold directly to Metaldyne until 2003 at the earliest). At the moment, the 1,300 employees are still working directly for Chrysler, which holds 60% of the joint venture stock. Metaldyne is managing the plant.

2000-2001

• Toluca transmission and engine plants closed.
• Cordoba, Argentina assembly plant closed.
• Campo Largo, Brazil - brand new plant closed. Chrysler suppliers built plants nearby in a cooperative venture, so this closure may permanently damage Chrysler's relationships with its suppliers and make it harder if not impossible to get suppliers to share risks and innovative technology.
• Lago Alberto assembly plant (Mexico) to close.
• Mound Road plant closed.
• Windsor van plant closed.

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