For the next month all Chrysler plants will be closed starting on Friday. The surprise announcement will help the automaker adjust production to slowing demands and conserve its cash flow.
The plants generally take a two-week holiday during this time of year.
Chrysler says that the tighter credit markets are keeping would-be buyers away. Because of the newer standards many dealers are unable to close sales because a lack of financing. The company estimates that 20 to 25 percent of their volume has been hit by the credit situation. In November sales for Chrysler slid 47.1 percent.
Without help from Washington both Chrysler and General Motors Corp. have said they will run out of cash within weeks. Chrysler says its cash flow will be down to $2.5 billion by December 31. That is the bare minimum to meet payroll, pay suppliers and run the company. By the beginning of January the company may not be able to keep up with the bills.
When the closing bells whistle on December 19 the plants will close for at least a month. A few of the plants will reopen on January 19, 2009 with others reopening on January 26.
The company is pleading for a $7 billion government loan to survive the recession. This is the worst slump in auto sales in the last 26 years.
Some of the plants will be down one shift when they reopen, including the Toledo Jeep plant in Ohio. More than 750 workers have had to be laid off to help the company survive. About 550 workers took an early retirement package and the other 200 have been laid off indefinitely.