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Japanese Car Decision May Cost Belvidere Jobs : Illinois Town Fears End of Quotas

March 07, 1985|JAMES RISEN | Times Staff Writer

BELVIDERE, Ill. — An hour's drive west of Chicago's O'Hare International Airport, deep in the farm country of northwestern Illinois, this quiet town of 15,000 hardly seems the place to find the front line in an international trade war between Japan and the United States.

But Belvidere is an auto town, and its people are just beginning to realize that Belvidere is about to become the first American community to feel the effect of last week's decision by President Reagan not to seek an extension of import quotas on Japanese cars when they expire at the end of this month.

In fact, there is a better-than-even chance that Reagan's decision will translate almost immediately into a loss of jobs and capital investment in Belvidere, and community leaders and workers alike are increasingly concerned about their town becoming a pawn in an international chess game.

"Whenever the President of the United States does what he's done in the last week, there's always going to be a possibility that I could lose my job," says Larry Weber, a 43-year-old assembly-line worker at Chrysler Corp.'s big plant here, which is Belvidere's largest employer.

Belvidere is more vulnerable than other auto towns because it is the only place where Chrysler makes its Dodge Omni and Plymouth Horizon subcompacts that compete directly with Japanese imports. Chrysler Chairman Lee A. Iacocca warned Washington earlier this year that his company will move its small-car production to Asia if a fifth year of quotas was not imposed.

Even before Reagan's announcement last Friday, Chrysler said it would triple its imports of small cars from its Japanese affiliate, Mitsubishi Motors Corp.--thus reducing the need for Omnis and Horizons built in Belvidere--if quotas were allowed to expire. And now that a decision on quotas has been made, Chrysler officials are warning that the company might cancel plans to invest about $300 million in its Belvidere plant to produce an all-new, import-fighting small car, code-named the P-car.

"We know what products we have to produce in the next five years, we just don't know where we are going to produce them," Iacocca said recently. "Only this time I don't mean which city or state, but which country."

In a press briefing today in New York, Iacocca is expected to spell out Chrysler's revised future product plans in the wake of the quota decision, and everyone in Belvidere is speculating about what Chrysler will do and fearing the worst. They believe that Iacocca will announce plans to build the P-car in Korea, leaving the outlook for the Belvidere plant very much in doubt.

"Iacocca's a good poker player," Weber says. "He said he would take the cars to Japan and Korea, and Reagan has called his bluff, so he'll do it."

Belvidere Mayor Gaius (Bud) Barr, who has been negotiating with Chrysler for five months to develop a package of local tax abatements and incentives to persuade the company to bring the P-car to Belvidere, doesn't believe that Chrysler will abandon Belvidere if it doesn't build the P-car there, but he's worried that thousands of jobs could still be lost.

Barr and other local leaders believe that Chrysler either will continue to build Omni and Horizon models in Belvidere for another couple of years, until those aging models lose their sales appeal, or make the plant the second source for its popular mini-vans, which are now built only in Canada.

But both alternatives would probably mean fewer jobs for Belvidere; Barr says Chrysler would use only one shift of about 2,000 workers for mini-van production, cutting Belvidere's current two-shift work force of about 4,000 in half. And if Chrysler just continues making Omni and Horizon models in Belvidere, it won't modernize its plant as it would if it built the P-car there. Eventually, the Omni-Horizon models, and the 2.2-million-square-foot Belvidere plant, would become obsolete.

"If the P-car comes here, we will be working to get a Chrysler stamping plant to come here, too, and we would work with Chrysler to attract to the area companies that would supply parts to the P-car as well," says Barr. "So the P-car could mean a lot to this area. But if it doesn't become a reality, all those other things we are trying to do to develop Belvidere would go down the drain. You see, decisions like this have effects that mushroom over time."

"If we don't get the P-car, we'll probably have much slower economic growth in this area than the rest of the country," adds Gerald Grubb, state attorney for Boone County, which includes Belvidere.

Chrysler's workers in Belvidere, many of whom voted for Reagan, are obviously more concerned about the effect of Reagan's decision to lift quotas might have on Belvidere.

Reagan Backers Scarce Now

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