Chrysler's End, One Step Closer??

[MountainDon]

Chrysler says it will close all 30 of its manufacturing plants for a month starting Friday.

The company needs to match production to slowing demand and conserve cash.

Ford, meanwhile, announced that it will shut down 10 of its North American assembly plants for an extra week in January due to the slumping U.S. auto market. Spokeswoman Angie Kozleski says the normal two-week holiday shutdown will be extended to Jan. 12

Chrysler says tighter credit markets are keeping would-be buyers away from their showrooms. Dealers are unable to close sales for buyers due to a lack of financing, and estimate that 20 to 25 percent of their volume has been lost due to the credit situation.

Among the Chrysler auto plants in Ohio is the complex that makes Jeeps in Toledo.

Chrysler claims it is nearing the minimum level of cash it needs to run the company and will have trouble paying bills after the first of the year.

Operations at the 30 plants will be idled at the end of shift on Friday and will not come back online until Jan. 19 or later.


I think Chrysler should stop making everything except Jeep badged products and Cummins engined Dodge trucks. Maybe rebadge the diesel Dodge truck as a Jeep. Then call themselves The Jeep Company/Corporation.

[harry51]

I see a lot of Dodge and Chrysler cars around these days....

[MountainDon]

I see a lot of Dodge and Chrysler cars around these days....

Yes, but it would seem they haven't made any money selling most of them. My understanding is that the Jeep, especially the Wrangler variants are what's making money for Chrysler. The Jeep SUV's aren't doing all that well either.

[Redoverfarm]

I think they made a terrible mistake by eliminating their rear wheel drive fleet vehicles.  Think back of how many police cars you saw back when they did make them.  Now anything goes.  IMO they did make good fleet cars in the 70's & 80's.  

[MountainDon]

That might be right John, but it's too late now. If When gas goes back up again the police won't be interested in big rear wheel drives either for many of their applications. As it was a few months back when gas was going up and up the NM State Police curtailed their regular patrols (Crown Vics) and added motorcycles.

[harry51]

I see a lot of Dodge and Chrysler cars around these days....

Yes, but it would seem they haven't made any money selling most of them.

I wonder if there could be labor issues at the car factories vs. the Jeep factories that are the cause of insufficient profit on the cars, as opposed to not enough margin in other areas of the manufacturing process?

[MountainDon]

I dunno Harry... could be.  But I recall back in the 90's sometime the Jeep was making nearly all the profits for Chrysler. Second best profit maker were their mini vans. As for everything else they could have quit making them back them and their bottom line would have improved greatly. That's why I say "ditto" today.

So whatever it is, nothing much seems to have changed in the past decade or two. Shame.

[harry51]

Shame indeed. It's a perfect example of why the bailout is bunk. It didn't work the first time on Chrysler, and it won't work now for them or the others, or for the banks, etc., either, for that matter.

[fishing_guy]

No matter how much money the government throws at the car companies throw at the problem, not much is going to be solved until the credit crisis sorts itself out.

My daughter (25 years old, college grad, gainfully employed) had her college beater (95 Dodge Neon) die on her.  My son-in-law, the mechanic, told her is was dead in the water, so she went car shopping.

She found a low-milage car at a car dealership.  Had the loan all set up and drove the car off the lot.

The dealer called her later in the week to inform her that the bank rejected her, even with a credit score of 850.  It took about 2 weeks to find a bank willing to loan her $10,000 on a 4 year loan.

If she is having problems with an 850 credit score, imagine what they want for a $15 or $20,000 new car loan.

[John_C]

the bailout is bunk. It didn't work the first time on Chrysler

I'll play devil's advocate on that one.  Under Lee Iacocca Chrysler returned to profitability and repaid the loans ahead of schedule. The Gov't got back every penny and then some.  That is not to be construed as an endorsement for the current plan(s).

[Redoverfarm]

Yes Don that is the reason for the Crown Vic's as it is the only rear wheel drive available now.  Front wheel drive are too dangerous for high speed manuvering.  If you loose traction in turns you also loose your steering.  I would say that if it wasn't for the fleet sales it would be gone long before now.  I don't think anyone has any ides of the room that is needed in the trunk thus the larger vehicles win again.  

[Squirl]

Don,
  Jeep wranglers or CJ's have consistently been the profit makers for over 45 years. There is a reason they have been making almost the same exact vehicle for that long, it works.  They have changed the Jeep SUV's as soon as they stop making a profit.  Jeep Wrangler owners are extremely loyal and there are not many similar cars on the market.  The original bronco's were close. 
As far as labor issues, I don't know.  My jeep was made in Canada.
PS. In full discloser, I am a Wrangler owner.

[desdawg]

Putting 30 facilities on minimum life support would no doubt save a lot of $$. I suspect that many employees will claim the time off as vacation, sick leave or find some way to be paid for some if not all of it. This may send some sort of message to the UAW as a look at what  the future could be like if things don't change. It will be interesting to see how it plays out down the line. 

[MountainDon]

I think their unemployment benefits will kick in.   

[Squirl]

Neither, They are paid full wages the whole time.  The only thing Chrysler saves is the cost of the parts for the car and the OT.  The union gave this up earlier this year, and this practice will end in 2010 when the employees' contract ends.  It has been going on since the beginning of the auto industry.  Plants are extremely fickle and rarely run at full capacity.  So lines are usually shut down for hours, days, weeks at a time. 

[MountainDon]

Associated Press
       DETROIT — Chrysler said Wednesday it is closing all 30 of its manufacturing plants for a month starting Friday as it seeks to counter the most severe downturn in U.S. auto sales in more than two decades.
    By extending the traditional two-week holiday shutdown, the struggling automaker said it can adjust production to slowing demand and conserve cash.
    CNN reported 46,000 workers would be affected. However, most of them are expected to get unemployment benefits, and Chrysler told The Associated Press it would make up the difference.................

Ford said Wednesday it will shut down 10 of its North American assembly plants for an extra week in January.
    Two of the Ford plants that will reopen as previously scheduled on Jan. 5 make the new F-150 pickup.
    General Motors has also announced extensions of its holiday shutdowns. 

[John_C]

Toyota ...... for the first time in 71 years..... will post a 150 billion yen ($1.7 billion) loss in the year through March, it said in a statement today, scrapping a previous forecast of a 600 billion yen profit.

And in three months Chrysler & GM will have a plan to return to profitability. 

[glenn kangiser]

I read that it  is a planned bankruptcy of the US portions of the manufacturers.  All have offices in other countries that will not go bankrupt, then all will become importers of foreign products manufactured at their other facilities and they will not have to pay the wages or benefits or retirement of the US workers.