[Malaki86]

Chrysler shuts down all production - Dec. 17, 2008

Close of business Friday will be the start of a monthlong closure of 30 U.S. plants. Company cites 'continued lack of consumer credit.'

NEW YORK (CNNMoney.com) -- Chrysler LLC announced late Wednesday that it is stopping all vehicle production in the United States for at least a month.
All 30 of the carmaker's plants will close after the last shift on Friday, and employees will not be asked to return to work before Jan. 19.
Chrysler blamed the "continued lack of consumer credit for the American car buyer" for the slow-down in sales that forced the move.
The company ordinarily shuts down operations between Dec. 24 and Jan. 5. This closure would add roughly two weeks to that shutdown.
Chrysler is the third of the Big Three automakers to suspend operations for January. Last week, General Motors announced it was idling 30% of its North American manufacturing capacity during the first quarter of 2009 in response to deteriorating market conditions. That move will take 250,000 vehicles out of production. On Wednesday, a Ford spokeswoman confirmed for CNN that the automaker is adding a week to its normal two-week seasonal shutdown at a number of its plants.
Chrysler would not say how many fewer vehicles would be produced because of this shutdown. A total of 46,000 employees will be affected. They will be paid during the time off through a combination of state unemployment benefits and Chrysler contributions, but they will not receive the full amount of their working pay, a Chrysler spokesman said.
"Chrysler dealers confirmed to the company at a recent meeting at its headquarters, that they have many willing buyers for Chrysler, Jeep and Dodge vehicles but are unable to close the deals, due to lack of financing," the carmaker said in an announcement. "The dealers have stated that they have lost an estimated 20% to 25% of their volume because of this credit situation."
Auto sales have been hit hard by tight credit and the struggling economy. Overall auto sales in the United States were down 37% last month compared with November 2007. Chrysler's situation was especially bad. Its sales dropped 47%.
Chrysler's financing arm, Chrysler Financial, has tightened lending terms for buyers and earlier this year, it announced it would no longer offer leases.
Industry seeking help from Washington
Chrysler, Ford Motor Co. (F, Fortune 500) and General Motors (GM, Fortune 500) have approached Congress for aid to help them get through the current financial crisis. A congressional effort to establish a stopgap, $14 billion loan program to help Chrysler and General Motors at least until next month collapsed in Congress last week.
The Bush administration has said it is working on a possible plan to throw the companies a lifeline using money from the $700 billion bailout approved by Congress in October, the Troubled Asset Relief Program or TARP.
"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 Wednesday. "We're aware of their financial situation and are considering possible policy options to provide assistance in an appropriate way. As we've said, a disorderly collapse of the auto industry should be avoided."
"The speed and severity of the U.S. auto market's decline has been unprecedented in recent weeks as consumers reel from the collapse of the financial markets and the resulting lack of credit for vehicle financing," GM said in a Dec. 12 announcement, citing a 41% drop in November sales.
Both GMAC and Chrysler Financial are trying to receive federal assistance under the TARP program. GMAC is affiliated with General Motors, which owns 49% of the finance company. The other 51% of GMAC is owned by a consortium of investors led by Cerberus, which owns Chrysler and Chrysler Financial.

[Shnerdly]

I guess it's time for the american worker to start competing with the rest of the world. I think that means new business models and new compensation packages based on performance instead of seniority.

[thebaldeagle655]

Let's see, little kid asks mama for money for candy, mama says no, little kid lays down in floor and throws temper tantrum by shutting down production. Unfortunately Uncle Sam will come to their aid without forcing the union to make serious concessions!

Who does this hurt? No one really. They have move vehicles assembled now then can be sold so they need the shut down to catch up with demand. Employees will receive 95% of their wages while the plants are shut down (yeah, lay me off won't you! I'll go home and draw 95% from now on!)

[west_coaster]

Originally Posted by thebaldeagle655

Employees will receive 95% of their wages while the plants are shut down (yeah, lay me off won't you! I'll go home and draw 95% from now on!)

I saw an interview with a Chrysler worker tonight on the news. He was practically crying, blaming the government for all his financial problems. He was asking the reporter how he was supposed to support his family and pay his bills on just his REGULAR SALARY alone. He was basically whining about not getting any overtime during his lay-off! I'm sorry, but when you base your finances on a "regular" amount of overtime, that's just plain stupid!

Absolutely NO pity for these union workers.

W.C.

[Malaki86]

I've only had one layoff in my life. I was working at Rubbermaid for $15/hour, 40 hrs per week - $600/week. When I went to the unemployment office, I was eliglible for the max pay - $318/week. THAT'S something to cry about.

[Uturn2001]

Sounds like someone is making mountains out of molehills, or at least out of small plains hills.

I used to run auto parts on a dedicated basis delivering to Chrysler and every year at X-mas they stop production and pretty much close down the plants for 2-3 weeks anyway and only have a small work force at that time doing maintenance and an inventory.

Now if they go longer than a month then there is something to truly be worried about. IMHO though this is not much more than Chrysler trying to convince everyone how much they need a major bailout.

[dobry4u]

The layoffs are really going to smack the JIT drivers. Even with the Prez in the check book, it still is going to be an adjustment.

[Windwalker]

I worked for Chrysler before I went into the Navy. Back then, they would shut down every year to "RE-TOOL" the plants. Get it ready to start producing the new models. It did fall right in with the Holidays, as I recall.

I see that Ford decided to try going it alone. They negotiated a line of credit with the financial institutions before the economic crunch really hit, and now will be using that to pull themselves through. Everything I've read about it says it's very much to their credit now. Wish 'em luck. If the blue-collar workers don't have the money to spend, they still won't sell cars.

[belpre122]

Originally Posted by Windwalker

I worked for Chrysler before I went into the Navy. Back then, they would shut down every year to "RE-TOOL" the plants. Get it ready to start producing the new models. It did fall right in with the Holidays, as I recall.

That is correct WW. Instead of retooling this year. I recommend that they bring in fleets of bulldozers that will rid us of any and all remnants of GM and Chrysler (and if need be Ford). The US economy needs (has!) to be rid of UAW slacker welfare payments. We are simply (unfortunately and unwillingly) making welfare/unemployment payments in this case for the short term as a "tool" to delay the inevitable. Nothing more, plenty less. These clowns are going to turn it around in a couple of months? C'mon folks! Baby's already out with the bath water! Way too late for a 9th inning run.........in this global economy.

Pay me now.....or pay me later.

[GMAN]

I wonder what our forefathers would think about our government giving billions away to save mismanaged companies? Most of our forefathers were farmers and businessmen. They either made it or didn't. There was NO government bailout. In fact, there wasn't much government, period. I wonder how much these representatives received out of this bail out money? If most of these representatives were businessmen rather than lawyers I don't think that we would have seen anything resembling a bailout.