Chrysler will close all 30 of its manufacturing plants for a month, starting Friday, to conserve cash and match production to slowing demand, the Detroit automaker announced on Wednesday.
Tighter credit markets are keeping would-be buyers away from showrooms, Chrysler said. Dealers are unable to close sales for buyers due to a lack of financing, and estimate that 20 to 25 per cent 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 Jan. 1.
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.
The White House, which has been trying to pressure lawmakers to approve a stalled $14-billion US bailout package of the auto industry, declined comment on the company's announcement.
The American car company split with its German partner, Daimler AG, in 2007. In October, Chrysler LLC announced it was eliminating 25 per cent of its salaried workforce.
In Canada, Chrysler employs about 10,000 people and operates a car assembly plant in Brampton, northwest of Toronto, a minivan factory in Windsor in southwestern Ontario, and parts operations in Toronto. Of the total, 938 work in salaried positions.
Chrysler Group, the North American division of the company that Cerberus Capital Management bought in mid-2007, lost $680 million US in 2006.
Also on Wednesday, Ford announced it will shut down 10 of its North American assembly plants for an extra week in January due to the slumping U.S. auto market.
Spokeswoman Angie Kozleski said the normal two-week holiday shutdown will be extended to Jan. 12 at all operating assembly plants except those in Claycomo, Mo., near Kansas City and the Dearborn, Mich., truck plant.