Fenton plants rumors swirl in chancy auto industry

By David Nicklaus | ST. LOUIS POST-DISPATCH

01/03/2007

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As 2006 began, Chrysler Group was everyone's favorite domestic automaker.

The U.S. unit of DaimlerChrysler had gained market share in 2005, and executives talked about running their plants at full capacity even as Ford and General Motors began the painful process of deciding which plants to close. Local officials beamed when, in December 2005, DaimlerChrysler announced plans to invest $1 billion in modernizing its two Fenton plants.

What a difference a year makes. Several plants, including both Fenton buildings, are on extended shutdowns because Chrysler needs to reduce its inventory of unsold cars and trucks. And according to recent reports, executives are working on a restructuring plan that may include job cuts and plant closings.

Here's the shocker: Some people are saying that Fenton, which seemed so secure a year ago, is one of the places where jobs are at risk.Chrysler hasn't even confirmed that a restructuring is in the works, let alone given any hints about what it might entail. But analysts have said the company might have one or two more plants than it needs.

In trying to identify which plants are at risk, analysts look at how Chrysler's various vehicles are selling. Some put a plant in Newark, Del., at the top of the hit list because it makes the slow-selling Dodge Durango.

But the Dodge Ram pickup isn't doing so well, either. Catherine Madden, an auto-industry analyst at Global Insight in Lexington, Mass., points out that the Ram, which was last redesigned in 2001, is the oldest full-size pickup design on the market. It has lost market share to newer trucks from Toyota and GM. And the Ram is made in three places: Fenton; Saltillo, Mexico; and the Dodge City plant in Warren, Mich.

Of those, Madden says Saltillo "is the most secure. Between St. Louis and Dodge City, it's really tough to say which would be more vulnerable."

Published reports in Canada have speculated that the Fenton minivan plant, which is next door to the pickup plant, also might be at risk of closing. Madden thinks that's less likely. Chrysler is due to introduce a next-generation minivan at next week's North American International Auto Show in Detroit.

"They're still the leader in that segment," she said. "I think they can be incredibly successful."

Chrysler makes its Dodge Caravan and Chrysler Town and Country minivans in both Fenton and Windsor, Ontario. Much of the billion-dollar investment here, which Chrysler is just beginning to spend, is to retool the minivan plant.

It's much too early for the workers in Fenton, or anyone else in St. Louis, to panic. Various wild and unfounded rumors also preceded restructuring announcements by Ford and GM earlier this year. But some of the rumors turned out to be true, as Ford's former employees in Hazelwood well know.

Patrick McKeehan, executive director of the Leadership Council Southwestern Illinois, has developed a stock response for people who ask him about possible auto-plant closings. "I think any auto plant in the country is vulnerable, based on demand, products and competition," said McKeehan, who formerly directed the St. Louis Regional Automotive Partnership and the Ford Hazelwood Task Force. "I'm not aware of any Ford, GM or Chrysler plant in the U.S. that can say for sure it will be here in 10 years