Transcripts

"Reviving the Economy: Government Responds"-Preventing Car Plant Closures

SUSIE GHARIB: Meanwhile some lawmakers on Capitol Hill are calling on the administration to hold off on shuttering some auto plants and take a second look at the impact of those closures. They say the restructuring at GM and Chrysler will leave many communities with empty factories. Those plants have provided hundreds of jobs and millions in tax revenues for decades. As we continue our series "Reviving the Economy: Government Responds," Diane Eastabrook visits a Wisconsin city that is dealing with the potential loss of a Chrysler plant for the second time.

DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Like all of its factories, Chrysler's Kenosha engine plant is temporarily closed while the bankrupt auto company pares huge inventories. But next year this facility is slated to shut down for good, along with seven other Chrysler plants across the country. That means this community perched on Lake Michigan will lose 800 jobs and a steady source of tax revenues. Todd Battle, the president of the Kenosha area business alliance, is now brainstorming about what the city will do once the 100-acre site stops making engines.

TODD BATTLE, PRES., KENOSHA AREA BUSINESS ALLIANCE: We have to start thinking about what is the environmental condition of the site. If you have to do demolition, what's that cost? How would the community control the site or work with the company that is closing it to have some control over the site?

EASTABROOK: The pending closure of the engine plant is bringing a sense of deja vu to Kenosha. Twenty years ago, Chrysler shuttered an assembly plant in the community. That action left 5,000 people without jobs and the city with a 70-acre parcel of land on its hands. Today a trolley skirts that tract of land which is now home to a 350-unit upscale condominium park and two museums. After Chrysler razed the assembly plant, Kenosha took over the property. It spent over $8 million cleaning up the site and millions more upgrading the area, before attracting developers. Mayor Keith Bosman says Kenosha is prepared to repeat the process at the engine plant, but he admits the cost may be double what it was two decades ago.

MAYOR KEITH BOSMAN, KENOSHA, WI: We know that there are problems there, industrial uses for over 100 years. We know that the cost could be $10 to $20 million just for cleanup. It might take a couple of years. We'll do the remediation. We'll start all over.

EASTABROOK: The engine plant sits in the center of Kenosha across from older commercial and residential properties. The city doubts another manufacturer would locate here, but thinks the land could be used by other businesses or redeveloped for housing. Robert Bach, senior economist for the real estate and investment firm Grubb and Ellis, believes the site could be rehabilitated, but he cautions it could take a long time.

ROBERT BACH, CHIEF ECONOMIST, GRUBB & ELLIS COMPANY: It's hard right now because cities and states don't have a lot of extra cash lying around to do this sort of thing, so these projects tend to get done over a period of years. We're not talking about having these sites redeveloped in a couple of years. You know, it might take five years. It might take even longer.

EASTABROOK: While Chrysler winds its way through bankruptcy reorganization, some in Kenosha hope the company's new partner, Fiat, will decide to keep the plant open. But if it doesn't, the community is confident it can rebuild when Chrysler leaves again. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Kenosha, Wisconsin.