Chrysler extends plant shutdowns

Mich. factories among 5 to stay closed an extra week; automaker cites slow sales in decision.

The Detroit News

Chrysler LLC is extending the shutdown of five plants, including three in Michigan, for another week, citing continued slow sales due to the financial crisis and industry downturn.

The automaker closed all 30 North American plants Dec. 19 for one month to reduce inventory. Workers at 23 of them will be back on the job next week.

Down an additional week are: Sterling Heights Assembly Plant (Chrysler Sebring and Dodge Avenger); Belvidere, Ill. (Dodge Caliber and Jeep Patriot and Compass); and the plant in Toluca, Mexico (Dodge Journey and Chrysler PT Cruiser).

Those workers are to return to their jobs on Jan. 26 "unless otherwise notified," Chrysler said in a release.

That also is the date that workers at the Toledo Jeep plant and supplier park return to work, while those making minivans in Windsor, Ont., and Vipers at the Conner Avenue plant in Detroit are due back Feb. 2.

Engine plants in Trenton and Dundee are also down an extra week.

Chrysler vice chairman Tom LaSorda said this week that closing plants and eliminating shifts in 2008 left the factories in a good position by reducing redundancy in the system, such as operating two minivan plants when demand warrants one.

The temporary month-long hiatus further brought inventory in line following a dismal fourth quarter, with Chrysler ending the year with a 53 percent drop in December U.S. sales.

Steve Landry, head of sales and marketing, said there is about 100 days' vehicle supply. He would prefer 70 to 80 days, but notes "plants completely down are not good for anybody."

LaSorda said plants are being brought back up on a product-by-product basis, attempting to give ample notice to suppliers.

"We will look at retail (sales) to be prudent before we fire plants up again," said Chairman Robert Nardelli.

Many of the affected plants make fuel-efficient vehicles that sold well when gas prices hit the $4-a-gallon mark. But sales dropped with pump rices.

Efforts to clear out 2008 Dodge Rams have been successful, said Vice Chairman Jim Press. Inventory has been reduced to less than a month's supply.

"Truck sales have really improved," Press said.

None of the Ram plants have seen their downtime extended.

Also affecting sales: the Congressional hearings that preceded a $4 billion loan for Chrysler.

"There is no question the hearings created a cloud at the consumer level," said Nardelli.