MILWAUKEE, FEB. 16 -- Chrysler Corp. Chairman Lee Iacocca said today he was dedicating all the profits from new Chrysler cars sold in Wisconsin this year to a trust fund to help the 5,500 workers in Kenosha who will lose their jobs.
Iacocca said that based on 1987 sales, the fund should amount to about $20 million to help laid-off auto workers make mortgage payments, educate their children and meet other financial obligations.
Speaking at a news conference, Iacocca said the trust fund would be in addition to about $1.3 million that the company will give governments to repay for capital improvements such as roads.
Iacocca stressed, however, there was no way he would change his mind about closing the Kenosha plant.
"The decision to close Kenosha was a crummy call but one we had to make. Time and the marketplace just caught up with an 86-year-old plant," Iacocca said.
Iacocca also said the company's decision to close the plant did not break any contracts with the state regarding the future of the former American Motors Corp. facility.
"We are guilty as hell of being cockeyed optimists and we are paying the price for the optimism right now," Iacocca said.
Iacocca said the company had hoped to continue building cars in Kenosha for three to five years, but car sales were not good enough to allow that.
"What we did unintentionally was to create expectations that couldn't be fulfilled," Iacocca said.
Iacocca said the decision to establish the trust fund should not be viewed as a precedent for other auto plant closings.
He said Kenosha was a unique situation because of the impact the closing will have on a relatively small city. Kenosha's population is about 75,000.
Iacocca said the trust fund may have the side effect of helping Chrysler car sales in Wisconsin. But he said, other than in the Kenosha area, Chrysler sales in Wisconsin have been up since the auto maker's announcement last month. Dealers in Kenosha were a major exception, however, Iacocca said.
"They were concerned they had nothing to do with this plant closing but were taking a beating," Iacocca said.
Iacocca also said Gov. Tommy G. Thompson's threats to file a lawsuit against the nation's third-largest auto maker were not a factor in setting up the trust fund.
Iacocca said he, Thompson and House Armed Services Committee Chairman Les Aspin (D-Wis.) would meet in Washington Thursday and he said he hoped an agreement would be reached that would avoid the need for the state and Chrysler to meet in the courtroom.
Aspin, whose congressional district includes Kenosha, said Iacocca's announcement was a positive first step, but more action was needed.