NEW YORK – Chrysler says it will close all 30 of its manufacturing plants for a month starting Friday.
The company needs to match production to slowing demand and conserve cash.
Tighter credit markets are keeping would-be buyers away from their showrooms, Chrysler says. Dealers are unable to close sales for buyers due to a lack of financing, and estimate that 20 to 25 percent of their volume has been lost due to the credit situation.
Chrysler claims 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.
Operations at the 30 plants will be idled at the end of shift on Friday, Dec. 19, and will not come back online until Jan. 19, 2009, or later.
General Motors Corp. said last week it will cut 250,000 vehicles from its first-quarter production schedule by temporarily closing 20 factories across North America.
The move affects most plants in the U.S., Canada and Mexico. Many will be shut down for the whole month of January.
Spokesman Tony Sapienza said normal production would be around 750,000 cars and trucks for the quarter.
GM and nearly all automakers who sell in the U.S. are mired in the worst sales slump in 26 years.
Cash-strapped GM is seeking government loans to stay in operation beyond the end of the year. The White House says it may tap the $700 billion Wall Street bailout fund to help GM and Chrysler stay in business after the Senate blocked a measure to provide $14 billion in immediate loans.