Halting production: Chrysler announced late Wednesday afternoon that it will idle its 30 manufacturing plants, including its Kokomo facilities, through Jan. 19. KT photo by Tim Bath
Halting production: Chrysler announced late Wednesday afternoon that it will idle its 30 manufacturing plants, including its Kokomo facilities, through Jan. 19. KT photo by Tim Bath
By JOHN DEMPSEY, Kokomo Tribune business writer


It's been more than 25 years since the Kokomo Chrysler plants have experienced an extended shutdown, but starting Friday, Chrysler will idle its local plants as well as others throughout the country for more than a month.

Chrysler announced late Wednesday afternoon that it will idle its 30 manufacturing plants through Jan. 19. A news release issued from the company said the move is intended to "keep production and dealer inventory aligned with U.S. market demand."

"Due to the continued lack of consumer credit for the American car buyer and the resulting dramatic impact it has had on overall industry sales in the United States, Chrysler LLC announced that it will make significant adjustments to the production schedules of its manufacturing operations," the release states.

The shutdown will take effect at the end of the shift Friday, and impacted employees will not return to work before Jan. 19, the release states.

The plants were scheduled to be shut down from Dec. 24 until Jan. 2 for the traditional holiday shutdown, according to United Auto Workers Local 685 president Jeff Shrock.

Kokomo Transmission Plant and Indiana Transmission Plant II are shut down this week as part of an inventory reduction that was scheduled in October, Shrock said. Both plants were supposed to resume production Jan. 5.

"They were taking them down to reduce inventory and that's been extended," he said.

Both will remain closed until Jan. 19.

Except for a scheduled inventory down week in January, ITP I, will not lose any other time. The plant is up and will run through Tuesday when it begins the holiday shutdown.

"Traditionally, at specific assembly areas in Kokomo, they plan starting in the fourth quarter to reduce inventory. If we're ahead [on parts], then they will take the week before or after the holiday and shut down," Shrock said.

These shutdowns add to the announcement made last week that 460 skilled and non-skilled local employees were put on indefinite layoff.

Earlier this week, Chrysler had said the Windsor minivan plant in Canada and Jeep plants in Toledo, Ohio, would be closed for the month of January.

But this shutdown is extraordinary and will have major implications for the roughly 9,716 Howard County residents employed in auto industry jobs.

"This hasn't happened in a number of years," said Shrock. He noted that several veteran employees talked of extended shutdowns that happened in the late 1970s and early 1980s when plants were closed for "a considerable amount of time, especially at the holiday."

"... But, in our day and age, this is uncommon, especially compared to what we're used to having happen," he added. "The length of this is uncommon. A week before or after, that's not so uncommon. But, the additional weeks are due to the economy. Chrysler dealers, Chrysler Financial, GMAC, all of them are really struggling."

Chrysler agreed the credit crunch is much of the problem. The release cited dealerships' problems closing deals with its customers due to lack of financing.

"The dealers have stated that they have lost an estimated 20 to 25 percent of their volume because of this credit situation," the release stated.

Chrysler was not the only automaker cutting back.

Ford also announced Wednesday it will shut down 10 of its North American assembly plants for an extra week in January due to the slumping U.S. auto market.

Spokeswoman Angie Kozleski says the normal two-week holiday shutdown will be extended to Jan. 12 at all operating assembly plants except those in Claycomo, Mo., near Kansas City and the Dearborn, Mich., truck plant.

Ford will also extend the shutdown at some engine, transmission and parts stamping plants, or shut portions of them to match production cuts at the assembly plants.

Greater Kokomo Economic Development Association president Jeb Conrad said the local shutdown "is not a total shock."

"I think everybody's eyes are on what the plan is going to be, both for the Big Three and what might be some shorter term support for the industry sector," said Conrad. "The structure of the automotive industry is going to be different no matter what happens."

Conrad, who has been on the job for a month, believes this is a good time for Kokomo to look into diversifying its economy.

"One reason I took the job and came to Kokomo is it is a community that has really realized things have to happen," he said. "One is to refocus time and attention on what we're looking to bring; and, while not completely disbanding the history of our workforce and its skills, but to diversify a bit.

"We have to put ourselves in position to be ready when things change down the road. Our reaction is to take this as an opportunity to find out what kind of capabilities and assets our community has to offer outside that sector."

He views it as a challenge.

"I told our board when I took this job that's the way I view it is as a huge opportunity to take a community with a rich tradition of hard work and skilled labor and look at what the economic needs look like three, five, 10 years down the road as well as in 2009," Conrad said.

"We all hope the automotive industry in the United States and in our community is operating and providing value."

The Associated Press contributed to this report.

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