Both Chrysler and GM have expressed a need for bailout funds by the end of the year. With that time fast approaching, the automakers are cutting back further and further. As a result of the government’s unhurried response, Chrysler is not closing a few plants; it is closing all plants in North America for a month staring tomorrow, December 19th.
According to Chrysler, the slump in sales isn’t the lack of interest but a lack of consumer credit to U.S. buyers. Dealers have complained of a loss of 20 to 25 percent of their volume because of the credit crisis. Chrysler’s U.S. sales have plummeted by 28 percent this year, boasting the biggest drop among major automakers. At the current rate, 2009 doesn’t look much brighter.
In the process of restructuring, Chrysler has already cut 5,000 white collar jobs. With this recent shutdown, some employees will return to work on January 19. However, in order to match production and dealer inventory with demand, further adjustments to production schedules are likely to follow.