Day One Of Total Shutdown For All Chrysler Plants; Greatest Schmatest

KANSAS CITY ˜ STAR

DETROIT | In response to plunging vehicle sales, Chrysler said Wednesday that it would close all 30 of its North American factories for at least one month, starting at the end of this week.

All U.S. automakers have been taking bold steps as they have struggled to survive the recession. Chrysler and General Motors Corp. fear they might not have enough money to pay their bills in a matter of weeks and are attempting to avoid imminent collapse while the Bush administration ponders a rescue.

alt1

With automakers suffering through the worst U.S. sales since World War II, Chrysler’s move — which will idle 46,000 workers — hinted at the dramatic actions that could follow soon without government aid.

Foreign automakers have been reacting to the slowdown, too. Toyota Motor Corp. said this week that it would delay work on a factory in Mississippi that would build the Prius hybrid.

Honda on Wednesday issued its third profit warning of the year, the latest sign of the drastic drop in demand that has hammered the global car industry.

Honda lowered its full-year forecast for net profits by 64 percent, to 185 billion yen ($2.11 billion), for the year ending March 31. That highlighted how tough the market has become as consumers, constrained by tight credit conditions and worried about the gloomy economic conditions, hold back spending even on the smaller and more fuel-efficient cars that had been expected to help Honda survive the current crisis better than many of its rivals.

Honda, Japan’s No. 2 carmaker, said it was cutting first-quarter production by 119,000 vehicles.

“Every day, the hardships we face are getting worse and worse. And there are no signs of recovery,” Honda President Takeo Fukui said at a news conference.

Nissan, Japan’s nation’s third-biggest automaker, added to the dismal news by saying it was reducing domestic production by an additional 78,000 vehicles and cutting 500 temporary workers.

As for Detroit, normally the Big Three automakers — Chrysler, Ford Motor Co. and GM — close their plants for about two weeks at the end of the year.

But following a 47 percent decline in sales last month, some Chrysler plants will be closed until February.

In addition, Ford said Wednesday that it would extend the holiday shutdown at most of its plants to a third week. The two exceptions, according to spokeswoman Angie Kozleski, are in Claycomo and Dearborn, Mich.

GM said last week that it would 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 month of January.

GM, attempting to cut costs, 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 sport utility vehicle sales.

The plant’s engines will extend the range of the rechargeable Volt, GM’s high-profile, next-generation vehicle that will be able to travel 40 miles on electricity alone. They will also power the Cruze, GM’s new small car that is supposed to get around 40 miles per gallon.

GM announced plans in September for the new engine plant, but the company is delaying the purchase of big-ticket items needed to build the factory, such as structural steel, said GM spokeswoman Sharon Basel.

Compiled by The Star’s Greg Moore from The New York Times, The Associated Press, Bloomberg News, and the Detroit Free Press.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s