Chrysler LLC will shutter all North American factories through January 19th. Company executives indicate longer layoffs are possible, in a move meant to stem cash losses.
Chrysler LLC will shut down production at all 30 North American plants once work is completed on Friday. The company's decision is in line with executive claims that their available cash is at critical levels.
Although holiday time off is normal at Chrysler, this much down time came unexpectedly. Workers were scheduled to get December 22nd through January 2nd as a paid holiday, but now they will not return to the factories until January 19th. They will be paid for their originally scheduled holiday, but are "laid off" for the additional two weeks.
In a statement, the company said, “Due to the continued lack of consumer credit for the American car buyer and the resulting dramatic impact it has had on overall industry sales in the United States, Chrysler LLC announced that it will make significant adjustments to the production schedules of its manufacturing operations.”
They also left the door open for longer layoffs by saying, "Impacted employees will not return to work any sooner than Monday, Jan. 19."
Some plants, like the Windsor, Canada, minivan plant, and the Conner Avenue sports car assembly facility in Detroit, will be shuttered all of January. The two Jeep plants in Toledo, Ohio, will stay shut through January 26.
One worker told the Detroit Free Press that, "It comes as no surprise.” Eddie Gordish, a worker at Detroit's Jefferson North Assembly, continued with, "It seemed odd to me that they announced it as if the whole month off was new. All of a sudden everything seems so crazy, so dire. It’s hard to know what’s going on.”
Chrysler believes its dealers are losing between 20% and 25% of sales because their customers are unable to get financing. To this, company spokesman Shawn Morgan told the newspaper, "Sales will improve. ... But we shouldn’t be producing vehicles without orders.”
Chrysler and General Motors have defended their need for a government sponsored bailout with claims of not having enough liquid cash on hand to pay off suppliers, debtors, and salaries. Cerberus, the private equity firm running Chrysler, manages over $16 billion of capital.