New Chrysler Minivans Selling So Well They're Closing The Factory

Come Halloween, Chrysler will idle its St. Louis South minivan plant indefinitely. And, just so the 1,500 employees at St. Louis South are clear about the meaning of "idle indefinitely," co-president Tom LaSorda said, "We see no intent to rerun this plant. We're idling it and it will likely be fully closed."

The plant was down to one shift already; after the closure, Chrysler will source the Grand Caravan and Town & Country from its Windsor, Ontario minivan plant. Additionally, on Sept. 2, the St. Louis North truck plant will be pared down to one shift, resulting in about 900 layoffs. Chrysler had spent approximately $800 million in plant improvements to the two facilites over the past two years, so look for Cerberus to increase the price of a Town & Country Limited from $36,755 to $288,995 in an effort to recoup costs. Union leaders speculate that some of Chrysler's decision was based on political circumstances, as both St. Louis facilities voted down last fall's master contract between Chrysler and the UAW, ratifying it only after significant negotiations. Health care costs may also have played a part: According to Glenn Kage Jr., financial secretary at UAW Local 136, Chrysler can make minivans in Windsor, Ontario, for $1,000 per vehicle less than St. Louis South because of the savings to the company of Canada's national health care system.
[Automotive News (Sub. Req.)]