Citing "continued lack of consumer credit for the American car buyer", Chrysler LLC announced late Wednesday that it is shutting all 30 of its US plants for at least a month starting December 19 as unsold cars and trucks pile up at showrooms.
Chrysler, awaiting a federal rescue as its cash dwindles, said plants will close after the last shift on Friday, and employees will not be asked to return to work before January 19. Ordinarily, the company shuts down operations between December 24 and January 5. The announced month-long closure adds roughly two weeks to the normal shutdown.
The decision will affect a total of 46,000 employees, who will be paid during the time off through a combination of state unemployment benefits and Chrysler contributions. However, a Chrysler spokesman said that the employees will not receive the full amount of their working pay.
One of the Big Three automakers, Chrysler is not the only one to suspend operations for January. Last week, General Motors announced it was idling 30% of its North American manufacturing capacity during the first quarter of 2009; and on
Wednesday, Ford added a week to its normal two-week seasonal shutdown at a number of its plants.
All three automakers - Chrysler, GM and Ford - turned to Congress for aid to help them get through the current financial crisis. But, the congressional effort - to establish a stopgap, $14-billion loan program to help the companies at least until next month - collapsed last week.
The Bush administration has said it is working on a possible plan to throw the companies a lifeline, using money from the Troubled Asset Relief Program or TARP - the $700 billion bailout approved by Congress in October.













This is why a bailout won't work
The plant closures at Chrysler illustrate why a bailout will not work. Consumers will not be buying cars in the kind of numbers needed to recoup the bailout money. The money would be better spent in the form of cash stimulus payments to individual taxpayers.