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From Social Irresponsibility to Social Responsiveness: The Chrysler/Kenosha Plant Closing

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Abstract

In 1987, Chrysler bought American Motors which included a plant in Kenosha, Wisconsin, a city of 72 000. Employing 6 500 workers, most of whom were members of the United Auto Workers (UAW), Chrysler became the city's largest employer. For decades, the UAW had a strong influence on city politics. However, in the 1980s young professionals in Kenosha began challenging this status quo.

Chrysler shocked the citizens of Kenosha when their executives announced the closing of their plant within a year. Wisconsin government officials and the UAW believed that Chrysler promised to stay for up to five years; they considered Chrysler's move to be a breach of contract. Chrysler responded that it was their "intention" -- not a contractual agreement -- to stay in Kenosha. From an ethical perspective, just cause, due process and mitigation of harmful effects should be applied in the discussion of a plant closing.

At first, Chrysler offered minimal compensation. Strong negative reaction, especially in the media, seemed to have a powerful effect on Chrysler's decision to close the plant but to offer generous social and financial assistance. Chrysler thus became socially responsive in providing the city with new and greater opportunities.

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  1. Management Department, Loyola University Chicago, 820 North Michigan Avenue, Chicago, Ilinois, 60611, U.S.A

    Thomas F. McMahon

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  1. Thomas F. McMahon
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McMahon, T.F. From Social Irresponsibility to Social Responsiveness: The Chrysler/Kenosha Plant Closing. Journal of Business Ethics 20, 101–111 (1999). https://doi.org/10.1023/A:1005753201925

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  • DOI: https://doi.org/10.1023/A:1005753201925

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