* Auto workers, allies appeal to Fiat to save engine plant

* Fiat has been offered Chrysler plant employing 500

The auto boom came fast to this harbor town on Lake Michigan where Ramblers first rolled off the line a century ago.

But the bust has been just as dramatic and decades in the making. Nash gave way to AMC, then Chrysler, then bankruptcy.

Now Kenosha finds itself at the front of a battle by auto workers and allies to persuade Fiat SpA (FIA.MI) and the Obama administration to rewrite the terms of the fast-march restructuring of Chrysler to save jobs.

For months, Glenn Stark, a union official in Kenosha, has been giving tours to Fiat and making the pitch that the Italian automaker has a future here as it takes control of Chrysler.

They are still coming, says Stark, who met with a Fiat team last month. As long as they're coming, I'm hopeful.

At stake are nearly 500 jobs and a $50 million payroll in Kenosha represented by the United Auto Workers, the union that controls a majority stake in Chrysler through its affiliated health care trust.

The coalition fighting to save Kenosha and nearly 2,000 other UAW-represented jobs at two other Chrysler plants slated to close next year sees it as an issue of fairness.

After Chrysler took $10 billion in U.S. assistance, it scrapped plans to bring a new more fuel-efficient engine to its Kenosha plant, sending the work to Saltillo, Mexico, instead.

We played the political card, you know, taxpayer dollars supporting Chrysler and the jobs going to Mexico, says Kenosha Mayor Keith Bosman.

Bosman's office looks out at the site of the lakeside plant that built the Chrysler Fifth Avenue and other models after the automaker's first federal bailout of 1979.

Two decades ago, UAW workers in Kenosha fought and won payouts of $250 million as Lee Iacocca's Chrysler shut down assembly work in town, leaving only the nearby engine plant. More than 5,000 workers lost their jobs.

Bosman, who hopes to raise up to $30 million of aid to clean up the Kenosha plant for a new owner, says keeping jobs in town now will be a business decision. The bottom line is the bottom line, says Bosman.

One focus for a potential new plant owner has been the Fiat's CNH Global subsidiary, which makes agricultural and construction equipment and has a plant nearby in Racine.

Fiat's powertrain unit has also been offered the plant. As a condition of increasing its Chrysler stake to up to 35 percent, Fiat would have to make a new engine in the United States under the terms of its deal with the U.S. Treasury.

Fiat and CNH had no comment.

The Kenosha plant remains owned by OldCarco, the Chrysler unit still in bankruptcy. It is slated to close in December 2010. We have not announced any changes to that plan, said Chrysler spokeswoman Shawn Morgan.

COURTING 'THE CREATOR'

Fiat has been quiet about Chrysler since the automaker's best assets were bought out of bankruptcy in June in a deal brokered by the Obama administration.

Chief Executive Sergio Marchionne has promised to announce a five-year plan for Chrysler in the first week of November at the automaker's headquarters near Detroit.

UAW officials remain hopeful that two other plants could get a reprieve, as well as Kenosha -- the Sterling Heights, Michigan assembly plant and the Detroit Axle plant.

A Chrysler plant in Detroit where UAW workers hand-build the Viper sports car is expected to be retooled to take on a new performance car for the Dodge brand.

Meanwhile, as Fiat teams under Marchionne pour over the Chrysler plants they have inherited, workers have watched for appearances by one key player: Stefan Ketter, a Brazil-born manufacturing guru who has become known as The Creator.

Ketter, who joined Fiat from Audi, has responsibility for manufacturing at Fiat and responsibility for determining which Chrysler plants survive, people involved in the talks say.

Before Fiat, Chrysler was in the hands of Cerberus Capital Management, a private equity fund that brought in a new management team. Chrysler adviser Jim Press, the only Cerberus holdover, was involved in early discussions about Kenosha.

The shifting cast of managers and the lack of certainty has been frustrating for many in Kenosha.

Rep. Paul Ryan, a Wisconsin Republican, says the decision to close the Kenosha plant was made with little notice and no review. The response from the new Chrysler has not given him much room for optimism.

We've made the pitch very specifically to Chrysler and to Jim Press and they've given no indication that they were interested, Ryan said.

Many say the sting of Chrysler's pullout from Kenosha is especially barbed because it marks such a sharp reversal from plans announced just two years ago.

Chrysler's six-cylinder engine program, once code-named Phoenix for its promise of rebirth, would have brought $450 million of new investment and new jobs into Kenosha.

They rode into town like a savior and they rode out like a thief, said Stark, president of UAW Local 72.

Mexico Michigan Chrysler