While Chrysler typically idles its plants between December 24th and January 5th, today the company announced that it would be closing all 30 of its US plants on December 19th, and ordered no employee to return to work until at least January 19th.
This latest announcement follows news that GM will be idling approximately 30% of its North American manufacturing during the first quarter of next year, in a plan to reduce vehicle production by 250,000 units. Ford also announced plans to add an additional week of no production “to a number of plants”.
Chrysler claims one of the reasons for the extended shut-down, apart from an obvious over-abundance of dealer inventory, is the fact that banks are not lending money to willing customers. In fact, Chrysler reports that they have lost an estimated 20%-25% in sales to the credit crunch alone. It should be noted that earlier this year, Chrysler Financial announced that it would no longer offer leases on its new vehicles, and tightened up lending terms to prospective buyers.
Still, closing the door on all of its factories for a month paints a bleak picture for Chrysler-a company who many believe are the weakest of the Big Three, and without help from the Federal government, could be the first to go down.
