Del. creates ‘proactive plan’ to save Newark’s Chrysler plant

By LULADEY B. TADESSE, The News Journal

Analysts speculate the Newark plant, which employs 2,100 people, will close because there is little market demand for the Dodge Durango, and the plant is underutilized. News Journal file

The Delaware Economic Development Office has offered DaimlerChrysler a plan to retain its Newark assembly plant, but conceded the state will have difficulty competing against another at-risk plant in Michigan.

Analysts speculate the Newark plant, which employs 2,100 people, will close because there is little market demand for the Dodge Durango, and the plant is underutilized. The company, which expects to report losses of
$1.3 billion for 2006, plans to announce a major restructuring plan, including potential plant closures, Feb. 14.

Terry Deputy, who heads the development office’s cluster that examines the automotive industry, was asked today by the New Castle County Council’s economic development subcommittee to discuss what the state is doing to keep the Newark plant open.

“What we have done is come up with a proactive plan,” said Deputy, who was among the state officials who traveled to Detroit to meet with Chrysler executives earlier this month. “We have looked at every opportunity to retain the Newark plant.”

Deputy would not discuss details of the plan because he said the state has signed a confidentiality agreement with Chrysler.

Sen. Tom Carper, D-Del., and Rep. Mike Castle, R-Del., who have been involved in the talks, have said in the past that Delaware is not offering Chrysler any cash incentives.

Lack of financial incentives could place Delaware at a disadvantage compared with a truck plant Michigan.

If it were to come down to financial incentives, Michigan would have more resources than Delaware, Deputy said. Delaware’s gross state product, estimated at $57 billion, pales in comparison with Michigan’s estimated $357 billion.

The Warren, Mich., plant, which makes the Dodge Ram, Dodge Dakota and Mitsubushi Raider, is not busy enough and could build the Durango and Aspen. The
Warren plant is close to its suppliers and has virtually no transportation costs. It also has a smaller utility bill than Newark’s. The Newark plant has to import more than 90 percent of its parts for the Durango and Aspen from the Midwest.

Deputy said if the plant does shutter, it would take at least two to three years for the facility to close and transfer its products to another plant.

County Council members expressed concern about the plant’s future. Some also were not satisfied with the state’s plans for the workers if the plant ends up closing.

“My concern is on the implications for the community and the real need for a strategic plan forward,” said Councilwoman Stephanie A. McClellan, who represents the 5th District, which includes Newark.