Chrysler announced Wednesday it is closing all its North American manufacturing plants for at least a month, the starkest move taken by U.S. automakers awaiting word about government loans.
DETROIT — Chrysler announced Wednesday it is closing all its North American manufacturing plants for at least a month, the starkest move taken by U.S. automakers awaiting word about government loans.
All three of the companies have been taking dramatic steps as they struggle to survive the recession and the slowest sales in 26 years. Chrysler and General Motors fear they might not have enough money to pay their bills in a matter of weeks.
Attempting to cut costs, GM was halting construction of a plant tied to one of its most important projects, the Volt. Ford also said it will shut down 10 plants for an extra week in January because of sluggish sales.
Chrysler said it would extend the normal two-week holiday shutdown that begins Friday to at least Jan. 19 at all 30 of its factories due to slumping sales.
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The lack of consumer credit is hampering sales and forcing the production cuts, Chrysler said. Chrysler, Jeep and Dodge dealers say they have willing buyers for vehicles, but they can’t close the deals, Chrysler said.
“The dealers have stated that they have lost an estimated 20 to 25 percent of their volume because of this credit situation,” Chrysler said.
The Bush administration is mulling ways to help the automakers after Congress failed to reach a deal on $14 billion in loans for GM and Chrysler. Ford has applied for a $9 billion line of credit but says it has enough cash to make it through 2009.
The Bush administration has signaled that concessions would likely be required of stakeholders in the deal — auto companies, the United Auto Workers union, bondholders and others.
Chrysler spokesman Dave Elshoff said four plants will be temporarily closed beyond Jan. 19.
Chrysler sales were off 47 percent last month and are down 28 percent through the first 11 months of the year.
At Ford, a company spokeswoman said Wednesday it will shut down 10 of its North American assembly plants for an extra week in January, also due to lower U.S. sales.
Spokeswoman Angie Kozleski says the normal two-week holiday shutdown will be extended to Jan. 12 at all operating but two assembly plants.
Ford will also extend the shutdown at some engine, transmission and parts stamping plants, or temporarily shut portions of them to match cuts at the assembly plants, she said.
The extra week of down time has been planned for several months as part of the company’s first-quarter production schedule, Kozleski said.
Ford’s U.S. sales were down 31 percent in November and are off 20 percent through the first 11 months of the year.
Laid-off workers at Ford and Chrysler get vacation pay for the normal holiday shutdown, then will receive unemployment benefits and supplemental pay from the company that total about 85 percent of their normal pay.
General Motors said last week it will temporarily close 20 factories across North America and make sweeping cuts to its vehicle production. Many of those plants will be shut down for the entire month of January.
GM said Wednesday it was delaying construction of a new engine factory in Flint, Mich., in an effort to conserve cash. The plant is to make 1.4-liter engines for the Chevrolet Cruze and the Chevy Volt plug-in electric car, two key products in the century-old automaker’s plan to turn itself around after relying on highly profitable truck and SUV sales.
Associated Press reporters Kimberly S. Johnson and Ken Thomas contributed to this story.