Economic fallout from Chrysler plant closing are wide-reaching
It was only right that workers displaced by Chrysler’s decision to cease operations in Fenton grabbed the spotlight when the plant closed last July.
Now, a year later, the economic fallout is touching the lives of men, women and children who never spent a day on the assembly line.
Rockwood School District, for example, once pulled 10 percent of its revenue from the taxes paid by Chrysler.
With that revenue cut in half, the district has eliminated some after-school activity buses, reduced the hours driver-education students spend on the road and is holding back on replacing retired teachers.
“We’re doing as much as we can to keep the changes away from the classrooms,” said chief financial officer Shirley Broz.
Aware of Chrysler’s position as the tenuous No. 3 player in a domestic auto industry that has ceded market share to foreign carmakers for 30 years, Rockwood and other taxpayer-supported entities had budget contingencies in the event the plant ceased to exist.
They didn’t count on a shutdown in the teeth of a severe economic downturn.
“If it had just been Chrysler that closed and the recession hadn’t been on top of it, I think we’d be OK,” said Fenton Mayor Dennis Hancock.
Hancock estimates the closing cost his city $1 million in revenue.
The toll: Cutting the $10 monthly credit city residents received on sewer bills, a salary freeze for municipal employees and suspending the city’s September parade and fireworks display to celebrate its heritage.
St. Louis County, meanwhile, was able to recoup $7 million in 2009-10 tax revenue due Fenton and the county by striking a deal with Chrysler in a dispute over the corporation’s bankruptcy protecting the assessed value of robotics equipment left in the plant.
Chrysler still owes more than $3.6 million, according to Nancy Schnoebelen, a spokeswoman for the St. Louis County Economic Council.
Meanwhile, officials hold hope that the former Chrysler site will one day again generate jobs for area residents and revenue for school districts and communities.
Gathering at the empty Chrysler factory in February, a host of state, local and national dignitaries — including Edward Montgomery, the director of recovery for Auto Communities and Workers under President Barack Obama — pledged $2.1 million to bring new manufacturing to the 5 million-square-foot facility.
Rumors to the contrary aside, a buyer for the site has yet to emerge.
Not all the news stemming from the Chrysler shutdown is grim: One Chrysler supplier’s building will soon be back in business.
Integram, a division of Magna International, manufactured seats for Chrysler minivans produced in Fenton from a factory in Pacific that employed 500. It closed in 2008 when minivan production halted.
“It was a big hit to the school district,” said Pacific City Administrator Harold Selby. “They paid a lot of taxes.”
But last month, Plaze Inc. announced it will expand its St. Clair operations to Pacific, adding 100 jobs. The aerosol container manufacturer was enticed by tax-free bonds issued by Pacific and state community development funds.
As the deal for the former Integram site became imminent, Plaze hired its first employee for its new Pacific operation: John Barnard.
Barnard is currently working out of the corporation’s offices in St. Clair.
He’ll return to the factory at 1000 Integram Drive in Pacific when Plaze begins production there next year.
Jacob Barker of the Post-Dispatch contributed to this report
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