SANTA FE SPRINGS — Because a realty company raised the rent by 900%, a subsidiary of Chrysler Corp. has decided to lay off 300 workers by closing a plant that for two decades prepared new cars for delivery to Southern California dealers.
Chrysler officials said the rent increase at the auto maker's Nucar Prep plant will also force the relocation of another subsidiary, an adjacent Dodge-Shelby testing center for high-performance automobiles.
The lease on 40 acres occupied by the two plants on Slauson Avenue near the 605 Freeway is held by Santa Fe Pacific Realty Co., which several weeks ago raised the rent after reappraising the property, said Tom Buckley, a spokesman for the realty firm's parent, Santa Fe-Southern Pacific Corp.
Buckley said it was not the realty company's intention to force Nucar Prep out of business. "All we are trying to do is generate a reasonable return on the property," Buckley said.
Surprise to Employees
Word of the closure came as a surprise to employees, some of whom had worked there since the plant opened in 1967, said Bob Lennox, coordinator for Teamsters Local 495, which represents about 200 workers at the plant. Company officials informed employees of the closure about two weeks ago and offered to help them find other jobs within Chrysler.
"It came completely out of the blue. The company has been profitable for years," Lennox said. "It couldn't have come at a worse time for these people, heading into the holidays."
Nucar Prep laid off 23 workers immediately after announcing the shutdown, prompting the Teamsters to file an unfair labor practice charge against Chrysler for failing to negotiate with the union about severance pay, Lennox said.
Company and union officials are scheduled to meet this week to try to work out a severance pay agreement, which Lennox said usually amounts to one week's pay for every year of service.
There had been no previous problems in renewing Nucar Prep's lease every five years, said Joe Tetherow, manager of Western public relations for Chrysler Corp. Tetherow declined to speculate on the realty company's motives for such a dramatic rate increase.
Nucar Prep annually processed about 60,000 vehicles for 78 Chrysler, Plymouth and Dodge dealers in Southern California, making last-minute checks of engines, fluid levels, alignment, interior and exterior appearances, among other things.
Tetherow said dealers will now become responsible for new car preparation, which is standard practice everywhere else in the country.
The closure will leave 300 workers without jobs in Santa Fe Springs, and also will mean that a year-old Nucar Prep satellite plant in Honolulu will close by Dec. 31, putting another 25 out of work, Tetherow said.
Chrysler is trying to find jobs for the displaced employees within the company, possibly in car preparation at individual dealerships, Tetherow said, emphasizing that the closure was not related to a recent decision by Chrysler Corp. Chairman Lee Iacocca to reduce the company's salaried employees by 9%.
"We made the decision to close this plant before Iacocca made his announcement," Tetherow said.
A relocation site has not yet been found for the Dodge-Shelby plant, where about 25 workers conduct research and development on high performance automobiles.