Chrysler Halts Manufacturing at All Plants for One Month

Dec. 18, 2008
Chrysler has 14 assembly plants, 10 powertrain plants, four stamping operations and five manufacturing affiliations outside of North America.

Chrysler on Dec. 17 said it would temporarily halt manufacturing as demand plunges and the clock ticks down on a hoped-for bailout from the federal government. Chrysler said it was halting its manufacturing for at least a month, beginning Dec. 19, in response to a credit crisis and ongoing debate on a government rescue for the sector.

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

"Last week several automakers announced significant downward adjustments in production for the first quarter of 2009, and to make sure our inventory remains aligned with market demand, Chrysler will also extend the holiday shutdown already in place."

As a result it said that "all Chrysler manufacturing operations will be idled at the end of the shift Friday, December 19, and impacted employees will not return to work any sooner than Monday, January 19, 2009." Chrysler has 14 assembly plants, 10 powertrain plants, four stamping operations and five manufacturing affiliations outside of North America.

Chrysler said it had informed the United Auto Workers union, employees and suppliers about the actions.

The company said that dealers have indicated "many willing buyers for Chrysler, Jeep and Dodge vehicles" but have been unable to close the deals, due to lack of financing.

The company, which is owned by private equity firm Cerberus, did not disclose the number of employees affected. A company fact sheet said Chrysler employed 63,480 as of September.

United Auto Workers leader Ron Gettelfinger told CNN the manufacturing halt was "disappointing news to us," adding that workers to weather a month out of work will have to dig into "a supplemental unemployment benefit pay."

"Again, it shows the stress that the industry is facing, and the requirement that the government step in as quickly as possible the ease some of the concerns," he added.

News of the temporary shutdown came a day after the White House warned that the U.S. auto industry would have to make "concessions" to win a government bailout. President George W. Bush said late Wednesday he was "looking at all options," according to the transcript of a Fox News interview. "A disorganized failure, disorganized bankruptcy or disorderly bankruptcy ... could cause great harm to the economy, beyond that which we're now witnessing. And that concerns me," Bush said. "And the other point is that, I'm not interested in ... really putting good money after bad."

Asked when he will decide the auto question, the president replied: "I'm thinking through, you know, it needs to get done relatively soon."

GM said last week it was idling 30% of its North American production "in response to rapidly deteriorating market conditions."

U.S. auto sales dropped 37% in November amid talk of a potential bankruptcy at General Motors or Chrysler should Washington fail to deliver a massive bailout package.

Copyright Agence France-Presse, 2008

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