Chrysler shutting down all plants for a month - DFWstangs Forums
 
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post #1 of 6 (permalink) Old 12-17-2008, 07:02 PM Thread Starter
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Chrysler shutting down all plants for a month

http://news.yahoo.com/s/nm/20081217/...ysler_shutdown



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Reuters – A man walks next to new cars at a parking lot in front of a Chrysler plant in Detroit, Michigan December … DETROIT (Reuters) – Citing a credit crisis and dwindling sales, Chrysler LLC on Wednesday said it would shut down all of its manufacturing operations from the end of this week for at least a month.

The blanket shutdown marked a deepening of the financial crisis for the embattled U.S. auto industry and came as Chrysler and its larger rival General Motors Corp both seek to shore up cash as they seek a federal bailout they say they need to survive.

Chrysler, considered the weakest of the Detroit automakers, made the announcement on its plant shutdown in a letter sent on Wednesday to its employees, suppliers and the United Auto Workers union that was also posted on its website.

Chrysler said its dealers were getting car shoppers into showrooms but losing between 20 percent and 25 percent of those potential sales because of the lack of consumer financing for new car purchases.

"As a result of the financial crisis, the automotive market remains depressed due to the continued lack of consumer credit for potential buyers," the automaker said in a statement.

Separately, Chrysler said its finance arm could be forced to stop making loans dealers use to finance inventory because the dealers have been pulling money out from a fund that helps finance the floorplan loans.

The shutdown by Chrysler will idle plants in the United States, Canada and Mexico producing vehicles for its Chrysler, Jeep and Dodge brands.

The more than 30,000 Chrysler workers in the United States represented by the UAW receive nearly full benefits and wages during plant shutdowns, but labor costs represent only about 10 percent of the total cost of the average vehicle.

By idling plants, Chrysler and other automakers can cut costs on inventory, components and related charges such as utilities for operating large production facilities.

The moves also keep finished vehicle inventories from piling up on dealer lots and increasing the pressure for even greater discounting to consumers.

GM said last week that it was cutting its first-quarter production schedule by 60 percent compared with the same period a year earlier.

Privately held Chrysler is 80-percent owned by private equity firm Cerberus Capital Management.

Chrysler's sales plunged 47 percent in November and were down almost 28 percent for the first eleven months of 2008.
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post #2 of 6 (permalink) Old 12-17-2008, 07:11 PM
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post #3 of 6 (permalink) Old 12-18-2008, 10:43 AM
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Chrysler is a privately owned company, the owner Cerberus Equity, has $7 billion cash reserves. Let Cerberus bail out thier own company, US tax dollars should never be used to bail our a private company that has $7 billion in the bank.

If they decide to liquidate Chrysler, it would improve everyone elses sales.
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post #4 of 6 (permalink) Old 12-18-2008, 12:22 PM
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Repost.

I think this is a prudent business decision in light of the vehicle surplus and poor sales.

The media over dramatizing this extended hiatus.

Quote:
Originally Posted by MR EDD View Post
it was not a problem to bring money to his house at 10pm.so why is it a problem to call and bitch.it wasnt a problem when we were all sitting around smoking pot together.yes i said it we all were smoking pot together.what now stupid.

Last edited by Mustangman_2000; 12-18-2008 at 04:26 PM.
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post #5 of 6 (permalink) Old 12-18-2008, 04:01 PM
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Bush said " No disorderly bankruptcy" but no bailout yet. Which is it?

Is Bush working behind the scenes for an orderly bankruptcy? Are there plans in motion to wait until the market's Christmas shut down to file bankruptcy? Market closes for a couple days, then bam bankrupt, financing all lined up and ready to start up the next day, allowing the market several days to digest the information before trading starts?
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post #6 of 6 (permalink) Old 12-18-2008, 04:02 PM
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Quote:
Originally Posted by TexasDevilDog
Bush said " No disorderly bankruptcy" but no bailout yet. Which is it?

Is Bush working behind the scenes for an orderly bankruptcy? Are there plans in motion to wait until the market's Christmas shut down to file bankruptcy? Market closes for a couple days, then bam bankrupt, financing all lined up and ready to start up the next day, allowing the market several days to digest the information before trading starts?

this would be a smart move.
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