Chrysler Shuts Down Production

[nnuut]

This is not good!
Chrysler shuts down all production

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

By Peter Valdes-Dapena, CNNMoney.com senior writer
Last Updated: December 17, 2008: 7:18 PM ET






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 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."
General Motors recently 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.
"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.

 

[James48843]

Chrysler shuts down, that will knock all Chrysler suppliers towards bankruptcy too. GM is next, I expect an annoucement by Friday of GM doing about the same thing. Many Chrysler suppliers also supply GM and Ford. Here comes the cascading destruction of the U.S. economy.

Expect 3 million more unemployed within 2 weeks.

We're going down.

Merry Christmas.

 

[XL-entLady]

The White House is proceeding with all deliberate speed to pass the Auto Bailout. :suspicious:

Lady

 

[Show-me]

Won't matter, I think even if they get the TARP funds they will shutter the plants. The writing is on the walls, who is buying like a drunk'n sailor besides the Fed. and Treasury, aka Taxpayer.

 

[nnuut]

It's going to be rough on the Market unless some bright fool can neutralize this thing! Maybe they just want their money or have run out of parking space for all of those unsold cars? I don't think it's the end of the world, but the "G" is tapping me on the shoulder!!

 

[ChemEng]

From the article:

The company ordinarily shuts down operations between Dec. 24 and Jan. 5. This closure would add roughly two weeks to that shutdown.

 

[James48843]

View attachment 5251​

 

[Buster]

From the article:

Thank you for that bit of unhyped sanity..This is not unusual, but a scare tactic

 

[James48843]

Detroit's Big Three Announce Plans to Shut Down Plants

Wednesday, December 17, 2008

All three major U.S. automakers announced plans Wednesday to shut down manufacturing plants due to the slumping domestic auto market, including a month-long closure of 30 Chrysler plants starting Friday.

Operations at Chrysler's 30 plants will be halted at the end of business on Dec. 19 and are not scheduled to return back online until Jan. 19, 2009, or later.

Chrysler has said tighter credit markets are keeping would-be customers from their showrooms, costing the company an estimated 20 to 25 percent drop in volume.

Chrysler, which is seeking $7 million in government loans, has claimed the company is nearing the minimum level of cash needed to operate the company.

Ford also announced it plans to shut down 10 of its North American assembly plants for an additional week in January instead of its normal two-week holiday stoppage. Only plants in Claycomo, Mo., near Kansas City, and in Dearborn, Mich., will be unaffected.

General Motors Corp., meanwhile, said it will halt construction of a factory in Flint, Mich., designed to make engines for the Chevrolet Cruze and the electric plug-in Chevy Volt, which is expected to travel up to 40 miles on electricity alone.

GM, which is seeking up to $18 billion in government loans, has said it needs $4 billion to continue operating through the end of 2008. The company also announced last week that it will cut 250,000 vehicles from its first-quarter production schedule by temporarily shuttering 20 North American factories.

 

[James48843]

Toyota's global sales mark worst drop in 8 years
Wednesday December 24, 6:28 am ET
By Yuri Kageyama, AP Business Writer

Toyota's global vehicle sales plunge 21.8 percent in November, worst drop in 8 years

TOKYO (AP) -- In more bad news for Japan's auto industry, Toyota said Wednesday its global vehicle sales plunged 21.8 percent in November, the biggest drop in eight years.Rival Nissan said its worldwide sales sank 19.8 percent and global production nose-dived a record 33.7 percent on depressed sales in the United States.

The dismal data comes two days after Toyota, Japan's biggest automaker, predicted that this fiscal year it would report its first operating loss in 70 years.
Toyota Motor Corp., running neck-and-neck against industry leader General Motors Corp. in global vehicle sales, sold 618,000 automobiles in November, down 21.8 percent from last November.
That's the biggest year-on-year slide since Toyota began tracking comparable data in January 2000. Such declines never reached 20 percent in the past, the company said.

Nissan Motor Co., Japan's third-biggest car manufacturer, said its global production plummeted 33.7 percent to 222,212, the largest drop since it started compiling such data in 1985. Worldwide sales dropped nearly 20 percent to 237,653 in the month.

"Weak demand in the United States and Europe pressured our production. A slump in domestic output also contributed" to the record fall, said Nissan spokeswoman Yuko Matsuda.

Japan's No. 2 carmaker, Honda Motor Co., also said Wednesday its global production in November tumbled 9.9 percent, the biggest fall in five years, to 326,176 vehicles. Honda does not provide global vehicle sales.
For the January-November period, Toyota sold 8.356 million vehicles around the world. Detroit-based GM has not released such figures.