Chrysler says to shut down all production for month - Mercedes-Benz Forum

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post #1 of 41 (permalink) Old 12-17-2008, 07:13 PM Thread Starter
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Chrysler says to shut down all production for month

Chrysler says to shut down all production for month
2 hrs 40 mins ago

DETROIT (Reuters) – Citing a credit crisis and dwindling sales, Chrysler LLC on Wednesday said it would shut down all of its manufacturing operations from the end of this week for at least a month.

The blanket shutdown marked a deepening of the financial crisis for the embattled U.S. auto industry and came as Chrysler and its larger rival General Motors Corp both seek to shore up cash as they seek a federal bailout they say they need to survive.

Chrysler, considered the weakest of the Detroit automakers, made the announcement on its plant shutdown in a letter sent on Wednesday to its employees, suppliers and the United Auto Workers union that was also posted on its website.

Chrysler said its dealers were getting car shoppers into showrooms but losing between 20 percent and 25 percent of those potential sales because of the lack of consumer financing for new car purchases.

"As a result of the financial crisis, the automotive market remains depressed due to the continued lack of consumer credit for potential buyers," the automaker said in a statement.

Separately, Chrysler said its finance arm could be forced to stop making loans dealers use to finance inventory because the dealers have been pulling money out from a fund that helps finance the floorplan loans.

The shutdown by Chrysler will idle plants in the United States, Canada and Mexico producing vehicles for its Chrysler, Jeep and Dodge brands.

The more than 30,000 Chrysler workers in the United States represented by the UAW receive nearly full benefits and wages during plant shutdowns, but labor costs represent only about 10 percent of the total cost of the average vehicle.

By idling plants, Chrysler and other automakers can cut costs on inventory, components and related charges such as utilities for operating large production facilities.

The moves also keep finished vehicle inventories from piling up on dealer lots and increasing the pressure for even greater discounting to consumers.

GM said last week that it was cutting its first-quarter production schedule by 60 percent compared with the same period a year earlier.

Privately held Chrysler is 80-percent owned by private equity firm Cerberus Capital Management.

Chrysler's sales plunged 47 percent in November and were down almost 28 percent for the first eleven months of 2008.


Copyright © 2008 Reuters Limited.
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post #2 of 41 (permalink) Old 12-17-2008, 07:27 PM
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Good riddance, let the door hit them hard so they never come back!
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post #3 of 41 (permalink) Old 12-17-2008, 07:42 PM
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I am seeing the same cars and trucks at the local Dodge dealer that I drive by every day. And I imagine their "off lease" inventory has got to be skyrocketing from the deals they were making back in 2006.

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post #4 of 41 (permalink) Old 12-17-2008, 08:16 PM
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Our local Chrysler dealer has a lot full of unsold new '08 minivans and SUVs that do not appear to be moving at all.
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post #5 of 41 (permalink) Old 12-17-2008, 08:18 PM
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I wouldn't touch those minivans, free or even if they paid me
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post #6 of 41 (permalink) Old 12-17-2008, 08:26 PM
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Quote:
Originally Posted by drewprof View Post
I wouldn't touch those minivans, free or even if they paid me
Why? What about their Pacifica SUV? Same quality? I found a new '08 Pacifica LX for $ 14,850 (discounted over $10k off the sticker).
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post #7 of 41 (permalink) Old 12-17-2008, 08:38 PM
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Why? What about their Pacifica SUV? Same quality? I found a new '08 Pacifica LX for $ 14,850 (discounted over $10k off the sticker).
WOW. That would be a very good deal. And everything I have heard on that car has been good.

Town and Country pretty much defined the genre 25 years ago. It took over a decade for everyone else to even begin to catch up. My inlaws are on their third one, each with over 140,000 Ohio miles and three somewhat energetic kids [the oldest, now 13 is 6'4", 170#]

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post #8 of 41 (permalink) Old 12-17-2008, 08:40 PM
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I did not realize they were still in buisness. I like the little note that Uaw workers get paid even when the plant is shut down. No wonder they don't give a shit if the place is going to close. Fucking scum bags.

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post #9 of 41 (permalink) Old 12-17-2008, 08:42 PM
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I wouldn't touch those minivans, free or even if they paid me

I disagree........
I have driven 4 different model years of the Chrysler minivans on 8 different trips between Calgary and Southern Florida, during all weather conditions (ice, snow, blizzards, etc) all-wheel and frontwheel versions.
I was most impressed with the handling and quality of the product.
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post #10 of 41 (permalink) Old 12-17-2008, 09:59 PM Thread Starter
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Chrysler, Ford idle factories; GM delays new plant

Chrysler, Ford idle factories; GM delays new plant

DETROIT – Chrysler announced Wednesday it is closing all its North American manufacturing plants for at least a month, the starkest move taken by U.S. automakers as they anxiously await word about government loans.

All three companies have been taking dramatic steps as they struggle to survive the recession and U.S. sales have dipped to their slowest rate in 26 years. Chrysler and General Motors fear they might not have enough money to pay their bills in a matter of weeks.

Attempting to cut costs, GM was halting construction of a plant tied to one of its most important projects, the Volt. Ford also said it will shut down 10 plants for an extra week in January because of sluggish sales.

Chrysler said it would extend the normal two-week holiday shutdown that begins Friday to at least Jan. 19 at all 30 of its factories due to slumping sales.

The news was another blow to the company's employees already nervous about their future in the industry.

"I haven't even bought any Christmas presents yet because I don't know what's going to happen next," said Jerry Fogarty, a 48-year-old married father of three who lives in the Detroit suburb of Wyandotte. He has worked at the Chrysler Trenton engine plant for nearly 16 years.

Fogarty said even though state unemployment and supplemental unemployment benefits will maintain much of his weekly income during the shutdown, it's little consolation if the company that once gave employees profit sharing checks soon goes out of business.

"I don't want to be laid off," Fogarty said. "I want to go to work tomorrow. ... We all want to work. That's all we want to do. It's scary, man. It's really scary."

The lack of consumer credit is hampering sales and forcing the production cuts, Chrysler LLC said in a statement. Chrysler, Jeep and Dodge dealers say they have willing buyers for vehicles, but they can't close the deals, Chrysler said.

"The dealers have stated that they have lost an estimated 20 to 25 percent of their volume because of this credit situation," the statement said.

The Bush administration is mulling ways to help the automakers after Congress failed to reach a deal on $14 billion in loans for GM and Chrysler. Ford has applied for a $9 billion line of credit but says it has enough cash to make it through 2009.

Funding for the loans is expected to come from the $700 billion Wall Street rescue fund, but many Republicans have objected.

"It's clear that the automakers are in a very fragile financial condition and they're taking steps to deal with it," White house press secretary Dana Perino said in a statement. "We're aware of their financial situation and are considering possible policy options to provide assistance in an appropriate way."

House Democrats have encouraged Treasury Secretary Henry Paulson to adopt accountability provisions included in a House-passed auto bailout bill — the product of a deal with the White House — as a condition to get the loans.

The measure would have given a Bush-appointed "car czar" oversight over any major business decisions by the automakers.

The Bush administration has signaled that concessions would likely be required of stakeholders in the deal — auto companies, the United Auto Workers union, bondholders and others.

Chrysler spokesman Dave Elshoff said four plants will be temporarily closed beyond Jan. 19: two plants in Toledo, Ohio, and one each in Ontario and Detroit.

Toledo North, which makes the Dodge Nitro and Jeep Liberty, and Toledo Supplier Park, which makes the Jeep Wrangler, will be closed until Jan. 26. The Windsor, Ontario, plant, which makes minivans, and Detroit's Conner Avenue plant, which makes the Dodge Viper roadster, will be closed until Feb. 2, Elshoff said.

Chrysler sales were off 47 percent last month and are down 28 percent through the first 11 months of the year.

At Ford, a company spokeswoman said Wednesday it will shut down 10 of its North American assembly plants for an extra week in January, also due to lower U.S. sales.

Spokeswoman Angie Kozleski says the normal two-week holiday shutdown will be extended to Jan. 12 at all operating assembly plants except those in Claycomo, Mo., near Kansas City, and the Dearborn, Mich., truck plant.

Ford will also extend the shutdown at some engine, transmission and parts stamping plants, or temporarily shut portions of them to match cuts at the assembly plants, she said.

The extra week of down time has been planned for several months as part of the company's first-quarter production schedule, Kozleski said.

Ford Motor Co.'s U.S. sales were down 31 percent in November and are off 20 percent through the first 11 months of the year.

Laid-off workers at Ford and Chrysler get vacation pay for the normal holiday shutdown, then will receive unemployment benefits and supplemental pay from the company that total about 85 percent of their normal pay.

General Motors Corp. said last week it will temporarily close 20 factories across North America and make sweeping cuts to its vehicle production. Many of those plants will be shut down for the entire month of January.

GM said Wednesday it was delaying construction of a new engine factory in Flint, Mich., in an effort to conserve cash. The plant is to make 1.4-liter engines for the Chevrolet Cruze and the Chevy Volt plug-in electric car, two key products in the century-old automaker's plan to turn itself around after relying on highly profitable truck and SUV sales.

The plant's engines will extend the range of the rechargeable Volt, GM's high-profile next-generation vehicle that will be able to travel 40 miles on electricity alone. They will also power the Cruze, GM's new small car that is supposed to get around 40 miles per gallon.

GM announced plans in September for the new engine plant, but the company is delaying the purchase of big-ticket items needed to build the factory, such as structural steel, GM spokeswoman Sharon Basel said.

Basel said Volt and Cruze development will continue as scheduled and the company still plans to bring them to showrooms in 2010.

Also Wednesday, Chrysler Financial, the company's dealer and consumer finance arm, warned dealers that it may temporarily stop financing vehicle inventories if dealers keep pulling large amounts of their money out of an account that helps fund those loans.

Chrysler Financial said in a letter to dealers dated Dec. 12 that recent withdrawals from the company's cash management account have been "unusual and unprecedented."

Amber Gowen, a spokeswoman for Chrysler Financial, said the company continues to provide financing for 75 percent of all Chrysler LLC vehicles shipped to U.S. dealers.

Sluggish auto sales worldwide are taking a toll on foreign automakers as well. Honda Motor Corp. said Wednesday that it would halt expansion in Japan, Turkey and India and cut 450 temporary workers in Japan through February.

Nissan Motor Co. said it would reduce Japanese production by 78,000 vehicles and also cut 500 temporary workers there.

___

AP Auto Writer Kimberly S. Johnson in Detroit and Associated Press Writers David Aguilar in Detroit and Ken Thomas in Washington contributed to this report.
Chrysler, Ford idle factories; GM delays new plant
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