Auto industry in St. Louis returning to high gear
For the last three years, David Pischel has spent his lunch hour serving up fried cod sandwiches at a downtown cafeteria here. This week, Mr. Pischel abandoned his post, with a smile on his face.
Pischel is one of 3,700 workers who were called back to their jobs last week at the Chrysler Corporation's big assembly complex in suburban Fenton. For Pischel, the call-back means an end to 60-hour workweeks that produced no fringe benefits and paychecks of only $355 a week, nearly $100 less than those he'll take home from Chrysler. The change ''excites'' him, Pischel says; he will finally have money to save and energy left for something besides work.
For St. Louis, the stakes are no less sanguine. From 1979 to earlier this year, the automobile industry here slumped even more than in the nation as a whole. But now the industry has barged into a strong recovery. In fact, the pendulum has swung to the other extreme, analysts say - the industry is now favoring St. Louis over many other locations.
All three major domestic automakers have contributed to the trend. But Chrysler has done the most.
Late last year, the company picked Fenton as the assembly site for its new sports cars, the Chrysler Laser and Dodge Daytona. That decision necessitated the call-back of a second shift at Plant No. 1 - a shift that reported for work for the first time Sept. 12. Meanwhile, the company also decided to reactivate its Plant No. 2 - closed since July 1980 - to build rear-wheel-drive New Yorker Fifth Avenues and other big cars which had to be taken out of production at a Canadian plant being converted for other uses. The first shift at Plant No. 2 also reported for work Sept. 12. And if market trends hold up, Chrysler will put on another shift at Plant No. 2 in January.
The net result: Chrysler's work force, which for the last three years has stood at only about 2,650 here, will leap to about 8,000 over the next four months.
Meanwhile, last October Ford Motor Company restored a second shift at its plant in suburban Hazelwood. The move resulted from the same market trend that prolonged the life of the New Yorker Fifth Avenue, which Chrysler had originally slated for extinction after the end of its Canadian production. Their minds now eased about gasoline prices, consumers again want big cars. And the Hazelwood plant is Ford's sole source of Ford LTD Crown Victorias and Mercury Grand Marquis - full-size, rear-wheel-drive cars.
In April, however, Ford showed it had more than the short term in mind for its 35-year-old plant here. It announced plans to spend $250 million to update and convert the plant for production of a new van for the 1985 model year.
Two years ago, General Motors Corporation said it would close its huge, 60 -year-old complex in North St. Louis last year. Instead, the plant is still operating, pumping out pickup trucks, and a second shift was restored last February. In May, GM executives announced they would keep the plant operating at least through the 1986 model year. And they also held out the possibility of indefinite use: They said they were considering the plant as the site for a new GM truck.
GM has been having its problems, however, opening a new plant here in suburban Wentzville. The $500 million plant, which will turn out new front-wheel-drive versions of the luxury Buick Electra and Oldsmobile 98, was to have started production in July. But problems with the car have caused the company to delay the start-up until at least early next year. Regardless, when the plant does come on line it will employ 2,800 workers to start, with a capacity for 6,000.
When the automobile industry here collapsed in 1979, the main reason was product mix: All three automakers made big cars or trucks here. Now the area is clearly capitalizing on the return to favor of those cars, but the renaissance goes deeper than that, analysts say.
The Midwest is reaping a benefit from the big import market on the coasts, especially the West Coast. With half the California market now going to imports, domestic automakers had to ship California-made cars back into the Midwest and the East to sell them, notes David Healy, an analyst with Drexel Burnham Lambert in New York. That's expensive, and it's only half the problem. Suppliers never moved en masse to California, so parts first had to be shipped to California. A car sold in the East ended up costing $700 more if it were made in California than in the Midwest, Mr. Healy says. So while the automakers have been closing down plants in California, they've been opening and expanding them here.
The area certainly needs it. The belly-flop of the automobile industry here was a big reason St. Louis suffered more deeply from the recent recession than the nation as a whole. Unemployment here exceeded the national average in each of the last three years. Now the industry is the brightest spot in the local economy.
Even so, industry employment may only return to about two-thirds of what it was at the peak of nearly 30,000 in the late 1970s. But that could change for the better, too. An industry trend for suppliers to locate more closely to assembly plants is expected to result in several companies moving plants here; 18 suppliers are considering the area right now, the chamber of commerce says.