Chrysler Shutting Down for One Month

BanningZ · 12-18-2008, 08:11 AM

Quote:

Chrysler Shutting Down for One Month
With Rescue Unresolved, Other U.S. Automakers Also Plan Production Cuts

By Peter Whoriskey
Washington Post Staff Writer
Thursday, December 18, 2008; 7:05 AM
Struggling U.S. automakers are launching a round of severe cutbacks as they wait for a government rescue, with Chrysler saying yesterday it will idle all 30 of its U.S. factories for one month.
Chrysler's plants will furlough 46,000 workers beginning Friday, as a planned two-week holiday shutdown is extended to a month and possibly longer. The company, which has told Congress it needed $7 billion to survive the month, also told dealers that it may suspend financing for new cars in a bid to conserve cash.
"No one will return to work any earlier than Jan. 19," Chrysler spokesperson Shawn Morgan said. "I don't want to get into speculating about what may happen after that. . . . We're going to continue to monitor the situation."
"If I were a Chrysler worker, I'd be worried that the plant won't reopen," said Brian Johnson, an industry analyst at Barclays Capital.
The moves come as other U.S. and foreign automakers are announcing steep production cuts that will idle tens of thousands of other U.S. workers as the industry copes with withered demand for new cars and trucks. Ford said yesterday that it would stop production for an extra week in January at all but two of its plants because of flagging consumer demand. General Motors said Friday that it will cut production and temporarily close 20 factories.

Honda and Toyota have also announced production cuts.

A plan to issue $14 billion in loans to the U.S. automakers died in the Senate last week, but the Bush administration has indicated it would consider using some of the $700 billion financial industry rescue program to help Detroit. "It's clear that the automakers are in a very fragile financial condition, and they're taking steps to deal with it," White House spokeswoman Dana Perino said yesterday. "We're aware of their financial situation and are considering possible policy options to provide assistance in an appropriate way. As we've said, a disorderly collapse of the auto industry should be avoided."
The New York Times reported this morning that Treasury Secretary Henry M. Paulson, Jr., was leading talks with Chrysler and GM over a possible auto industry reorganization to be pursued in conjunction with any federal aid. At the same time, the Wall Street Journal reported on Thursday that Chrysler and GM had reopened discussions about a possible merger. Earlier talks foundered, but may develop new momentum because of demands from Washington for a major overhaul of the domestic auto industry.

GM is a publicly traded company. Chrysler is owned by Cerberus Capital Management, a private equity firm that also owns stakes in GM's and Chrysler's separate financing arms.

The industry shutdowns offer a sense of the kind of economic damage the domestic auto industry's collapse could cause. The Big Three -- GM, Chrysler and Ford -- employed about 240,000 U.S. workers at the end of 2007. Foreign automakers employed about 113,000 people in the United States.
The U.S. auto industry's suppliers employ an additional 975,000 people, according to the Center for Automotive Research in Ann Arbor, Mich. The furloughs "are a harbinger of things to come if these loans are not secured," said Dennis Virag, president of the Automotive Consulting Group in Ann Arbor.
Auto plants normally shut down over the winter holiday, but the new reductions extend the usual closures. Chrysler's plants had been scheduled to stop production from Dec. 24 to Jan. 2, but now will close Friday and stay dark until at least Jan. 19.

Two factories in Toledo that make the Jeep Liberty, Jeep Wrangler and Dodge Nitro will be closed until Jan. 26, the company said. A minivan plant in Canada and a plant in Detroit that makes the Dodge Viper will remain shut until Feb. 2.
Most of the workers will receive unemployment coverage equivalent to nearly full pay during the furloughs, officials said. Asked whether the announcement might be viewed as a means of influencing politicians who are weighing a bailout, Chrysler spokeswoman Mary Beth Halprin said, "This is really a response to what we're seeing in the marketplace. . . . We run plants when we have orders. We don't run plants when we don't have orders."
While the U.S. automakers have drawn most scrutiny because of their request for government aid, the downturn has battered Detroit's foreign competitors as well.

Honda has cut its annual forecast and said it will trim global production by more than 300,000 vehicles. Toyota said earlier this week that it will halt construction of a plant to build the Prius in Mississippi as sales of the fuel-efficient gas-electric hybrids have sagged along with gas prices and the economy.
"This is not just the Big Three who are in trouble," Virag said. "This is the entire U.S. auto industry, including domestic and transplants."
The overall downturn has made consumers skittish about big purchases, and the global credit crisis has made it harder for consumers to get loans to buy cars. Chrysler said yesterday that its dealers have lost as much as 25 percent of potential sales in recent months because buyers have been unable to line up financing.

For the first 11 months of this year, Chrysler sales were down nearly 28 percent from the same period last year.
Now, Chrysler says, it is approaching the minimum level of cash it needs and will have trouble paying its bills after Jan. 1. Chrysler is owned by private-equity firm Cerberus Capital Management, which bought the automaker for $7.4 billion in 2007.
Chrysler and GM warned last month that they could run out of cash by the end of the year without aid from the federal government. Chrysler expects to have only about $2.5 billion on hand by Dec. 31, the minimum needed to pay employees and suppliers and keep the company running.
The furloughs are "a grim reminder of a grim situation," Johnson said.
Staff writer William Branigin contributed to this report.

Big surprise.

Quote:

""And it does look like a Phantom.....until a real phantom rolls up.....then your like "SH*T NIG*A SH*T NI*GA I NEED TO GET THE F*CK OFF THIS STREET NI*GA SH*T"." -Katt Williams

nogoodname · 12-18-2008, 08:33 AM

Chrysler really isnt doing well over here, the dealerships in my area are giving deals like if you buy a Chrysler 300C, you'll get a Dodge Caliber free as a throw in.......very desperate !!

Slidefox · 12-18-2008, 08:34 AM

Damn.... I guess we saw this coming!!

nogoodname · 12-18-2008, 09:10 AM

thats so crazy for Chrysler to give a 2 for 1 in cars...lol

frcefed · 12-18-2008, 09:58 AM

If they had something that involved buying a Viper and getting a Challenger SRT8 for free I might jump on it lol.

K maybe not !

dad · 12-18-2008, 12:02 PM

Quote:

Originally Posted by nogoodname007

Chrysler really isnt doing well over here, the dealerships in my area are giving deals like if you buy a Chrysler 300C, you'll get a Dodge Caliber free as a throw in.......very desperate !!

They also could be trying to scare the Goverment into giving them that bailout they asked(Begged) for.

jetnoirZ · 12-18-2008, 12:20 PM

eh good riddence but i gotta agree might me a tactic to scare the US govt into the bail out $

dad · 12-18-2008, 12:32 PM

WASHINGTON – The Bush administration is seriously considering "orderly" bankruptcy as a way of dealing with the desperately ailing U.S. auto industry.

White House press secretary Dana Perino said Thursday, "There's an orderly way to do bankruptcies that provides for more of a soft landing. I think that's what we would be talking about."

President George W. Bush, asked about an auto rescue plan during an appearance before a private group, said he hadn't decided what he would do.

But he, like Perino, spoke of the idea of bankruptcies organized by the federal government as a possible way to go.

"Under normal circumstances, no question bankruptcy court is the best way to work through credit and debt and restructuring," he said during a speech and question-and-answer session at the American Enterprise Institute, a conservative Washington think tank. "These aren't normal circumstances. That's the problem."

The comments came a day after Chrysler LLC announced it was closing all its North American manufacturing plants for at least a month as it, General Motors Corp. and Ford Motor Co. await word on government action. General Motors also has been closing plants, and it and Chrysler have said they might not have enough money to pay their bills in a matter of weeks.

Prices of GM and Ford stocks were down substantially after the White House comments Thursday. Though Ford, unlike General Motors and Chrysler, is not seeking billions of dollars in federal bailout loans, a major collapse of the other two would be expected to badly damage Ford as well.

Bush said the auto industry is "obviously very fragile" and he is worried about what an out-and-out collapse without Washington involvement "would do to the psychology" of the markets.

"There still is a lot of uncertainty," he said.

At the same time, the president said anew that he is worried about "putting good money after bad," meaning taxpayer dollars shouldn't be used to prop up companies that can't survive the long term.

He revealed one other consideration — that Barack Obama will become president in just over a month.

"I thought about what it would be like for me to become president during this period. I believe that good policy is not to dump him a major catastrophe on his first day in office," Bush said.

At the White House, Perino said, "The president is not going to allow a disorderly collapse of the companies. A disorderly collapse would be something very chaotic that is a shock to the system."

She said the White House was close to a decision and emphasized there were still several possible approaches to assisting the automakers, such as short-term loans out of a $700 billion Wall Street rescue fund. Bush has resisted this approach before, and it is adamantly opposed by many Republicans.

"It's in the spectrum of options and there are a lot of options," Perino said.

She said one of the factors delaying an announcement on an auto rescue plan is the continuing discussion between the administration and the various sides that would have to sign on to a managed bankruptcy — entities such as labor unions and equity holders in addition to the companies themselves.

"In any scenario that comes forward after this decision-making process, all those stakeholders are going to have to make tough decisions," she said.

The presidential spokeswoman would not put a timetable on when an announcement would come, and suggested it may not happen this week. But something must be done, she said.

"If you thought that our economy today could handle the collapse of the American auto industry, then you might come to the conclusion that doing nothing was an option," Perino said. "We're going to do something".

12-18-2008, 08:34 AM	#3 (permalink)
Slidefox Previous Moderator Join Date: Nov 2008 Location: Arizona Posts: 1,534 Drives: A Pony Rep Power: 213	Damn.... I guess we saw this coming!! __________________ Forum Rules: Click Here Before Posting Click Here to Become a Premium Member Go Turbo or Go Home!!//Cowboys 2012 Superbowl Champs// Suns 2012 NBA Champions

12-18-2008, 12:32 PM	#8 (permalink)
dad Grand Prix of Endurance Join Date: Nov 2008 Location: Tennessee Posts: 3,476 Drives: Mulsanne Straight Rep Power: 25	WASHINGTON – The Bush administration is seriously considering "orderly" bankruptcy as a way of dealing with the desperately ailing U.S. auto industry. White House press secretary Dana Perino said Thursday, "There's an orderly way to do bankruptcies that provides for more of a soft landing. I think that's what we would be talking about." President George W. Bush, asked about an auto rescue plan during an appearance before a private group, said he hadn't decided what he would do. But he, like Perino, spoke of the idea of bankruptcies organized by the federal government as a possible way to go. "Under normal circumstances, no question bankruptcy court is the best way to work through credit and debt and restructuring," he said during a speech and question-and-answer session at the American Enterprise Institute, a conservative Washington think tank. "These aren't normal circumstances. That's the problem." The comments came a day after Chrysler LLC announced it was closing all its North American manufacturing plants for at least a month as it, General Motors Corp. and Ford Motor Co. await word on government action. General Motors also has been closing plants, and it and Chrysler have said they might not have enough money to pay their bills in a matter of weeks. Prices of GM and Ford stocks were down substantially after the White House comments Thursday. Though Ford, unlike General Motors and Chrysler, is not seeking billions of dollars in federal bailout loans, a major collapse of the other two would be expected to badly damage Ford as well. Bush said the auto industry is "obviously very fragile" and he is worried about what an out-and-out collapse without Washington involvement "would do to the psychology" of the markets. "There still is a lot of uncertainty," he said. At the same time, the president said anew that he is worried about "putting good money after bad," meaning taxpayer dollars shouldn't be used to prop up companies that can't survive the long term. He revealed one other consideration — that Barack Obama will become president in just over a month. "I thought about what it would be like for me to become president during this period. I believe that good policy is not to dump him a major catastrophe on his first day in office," Bush said. At the White House, Perino said, "The president is not going to allow a disorderly collapse of the companies. A disorderly collapse would be something very chaotic that is a shock to the system." She said the White House was close to a decision and emphasized there were still several possible approaches to assisting the automakers, such as short-term loans out of a $700 billion Wall Street rescue fund. Bush has resisted this approach before, and it is adamantly opposed by many Republicans. "It's in the spectrum of options and there are a lot of options," Perino said. She said one of the factors delaying an announcement on an auto rescue plan is the continuing discussion between the administration and the various sides that would have to sign on to a managed bankruptcy — entities such as labor unions and equity holders in addition to the companies themselves. "In any scenario that comes forward after this decision-making process, all those stakeholders are going to have to make tough decisions," she said. The presidential spokeswoman would not put a timetable on when an announcement would come, and suggested it may not happen this week. But something must be done, she said. "If you thought that our economy today could handle the collapse of the American auto industry, then you might come to the conclusion that doing nothing was an option," Perino said. "We're going to do something". __________________ We can do without any article of luxury we have never had; but once obtained, it is not in human nature to surrender it voluntary.

12-18-2008, 08:33 AM	#2 (permalink)
nogoodname Lifetime Premium Join Date: Nov 2008 Location: Montreal Posts: 22,357 Drives: E46 M3 Rep Power: 1764	Chrysler really isnt doing well over here, the dealerships in my area are giving deals like if you buy a Chrysler 300C, you'll get a Dodge Caliber free as a throw in.......very desperate !!

12-18-2008, 09:10 AM	#4 (permalink)
nogoodname Lifetime Premium Join Date: Nov 2008 Location: Montreal Posts: 22,357 Drives: E46 M3 Rep Power: 1764	thats so crazy for Chrysler to give a 2 for 1 in cars...lol

12-18-2008, 09:58 AM	#5 (permalink)
frcefed Base Member Join Date: Dec 2008 Location: Edmonton, ab,Canada Posts: 50 Drives: g37s Rep Power: 16	If they had something that involved buying a Viper and getting a Challenger SRT8 for free I might jump on it lol. K maybe not !

12-18-2008, 12:20 PM	#7 (permalink)
jetnoirZ Base Member Join Date: Dec 2008 Location: chandler,AZ Posts: 24 Drives: 2007 350z Rep Power: 16	eh good riddence but i gotta agree might me a tactic to scare the US govt into the bail out $