SCREECHING HALT
The crippled auto industry suffered another body blow yesterday when Chrysler announced it will close all 30 of its North American manufacturing plants for a month, idling tens of thousands of workers, starting tomorrow.
The bombshell announcement was quickly followed by Ford saying it will shut down 10 of its plants in North America for an extra week in January.
The drumbeat of doom began last Friday, when General Motors revealed it was temporarily closing 20 of its North American plants and planned to build 250,000 fewer cars and trucks in the first quarter.
Yesterday, GM indefinitely suspended work on a $370 million factory in Flint, Mich., that is intended to make engines for the Volt electric car.
The announcements came six days after the Senate killed a $14 billion plan to bail out Detroit’s Big Three automakers.
Last night, The Wall Street Journal reported GM and Chrysler have reopened merger talks, as Chrysler owner Cerberus Capital Management has signaled its willingness to give away part of its ownership in the automaker.
The Journal reported that with cash running low at both companies, Cerberus took the initiative to restart the discussions, which had stalled weeks ago. At that time, both GM and Chrysler viewed a business combination as impractical and as a distraction from their mounting liquidity problems.
The Chrysler closings affect some 46,000 workers in the United States, Canada and Mexico. The 30,000 workers in the United States will receive nearly full wages and benefits during the shutdowns.
The number of Ford and General Motors workers affected was not immediately available.
The Chrysler shutdown will idle plants in the United States, Canada and Mexico.
“As a result of the financial crisis, the automotive market remains depressed due to the continued lack of consumer credit for potential buyers,” Chrysler said in a statement.
Tighter credit markets are keeping would-be buyers away from their showrooms, the privately owned company said, and dealers estimate that 20 to 25 percent of their volume has been lost.
Chrysler said 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.
The 30 plants will be idled at the end of the shift tomorrow and will not come back online until Jan. 19 – or even later, the company said.
Chrysler, the weakest of the Big Three, saw its sales plunge 47 percent in November.
Ford, meanwhile, said the normal two-week holiday shutdown will be extended to Jan. 12 at 10 assembly plants.