ROGERSVILLE — The ripple effect of Chrysler’s bankruptcy and production stoppage announcement Thursday hit Rogersville hard, as the local TRW Automotive plant followed suit with an immediate work stoppage of its own.
At 3 p.m. Thursday, TRW employees in Rogersville were told the plant would be shut down temporarily, idling approximately 200 workers.
TRW Vice President of Communications Tom Wilkerson told the Times-News Thursday the shutdown takes effect Monday. The Rogersville plant primarily produces steering components used in Chrysler products.
Wilkerson said the fate of Chrysler and TRW are intertwined. If and when Chrysler resumes production, so will TRW. That could happen as quickly as 30 to 60 days.
Chrysler filed for Chapter 11 bankruptcy protection Thursday and announced it will temporarily halt most of its vehicle production while it completes a deal with Italian car maker Fiat designed to revive the ailing automaker.
Under bankruptcy, Chrysler would still sell cars, and the government would back its auto warranties. But Chrysler said Thursday that it will idle its plants during the legal proceedings.
“A very large percentage of the business within the Rogersville plant is for Chrysler,” Wilkerson said Thursday from TRW headquarters in Livonia, Mich. “With Chrysler announcing they’re going to shut down from 30 to 60 days pretty much all their North American operations, in reaction to that, Rogersville, matching the customer demand, is going to shut down temporarily as well. As things get assessed, and as Chrysler decides how it emerges from this structured bankruptcy and how they’re going to start back up, that will have a lot to do with what happens as far as when Rogersville gets back to operations.
“The plant is primarily going to be shut down for an unspecified period of time, but I’m thinking it will probably closely match how long Chrysler has shut down their operations. The impact right now is probably going to be around 200 employees.”
With TRW’s fate tied so closely to the fate of Chrysler, Wilkerson said there is optimism within his company that the Chrysler merger with Fiat will ultimately save the Rogersville plant. The federal government is also behind the merger, and President Barack Obama said Thursday the bankruptcy should be perceived as “one more step on a clearly charted path to Chrysler’s revival.”
Thursday’s announcement will have an impact on TRW plants worldwide, although Wilkerson said that as of the end of business hours Thursday the number of TRW temporary layoffs worldwide was not known.
TRW employees didn’t have any warning that this shutdown was coming Thursday, although all eyes were on what was going to happen with Chrysler, which had been on a federally imposed deadline to restructure its debt by Thursday.
Wilkerson noted that company heads at TRW didn’t know it would make this decision Thursday until it learned of Chrysler’s fate. In fact, Wilkerson had only received the news five minutes before being contacted by the Times-News Thursday afternoon.
“Suppliers (such as TRW) are under a lot of pressure right now, and we’ve all got to hope that the auto industry is going to survive and that suppliers are going to be able to weather the storm,” said Wilkerson. “We’re not saying we’re shutting the doors of the facility. It’s just supply and demand. Right now with our customer down it doesn’t make a lot of sense to be making parts that aren’t being asked for.”
Wilkerson added, “At this point in the proceedings we say it’s temporary layoffs due to customer demand, and as we get some clarity on what happens to Chrysler and when they start up again, certainly that’s when Rogersville will be back in business.”