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Chrysler, awaiting a federal rescue as its cash dwindles, will shut all 30 of its plants for at least a month starting tomorrow as unsold cars and trucks pile up at showrooms.
Ford said it will idle most of its North American assembly plants for the first week of January, while General Motors said a new factory making engines for the Chevrolet Volt electric car is being delayed to conserve cash.
The cutbacks showed how far automakers are going to save money and prune output in a year in which industrywide US sales are poised to fall to their lowest levels since 1991. GM and Chrysler say they may run out of operating funds in just weeks without emergency US aid.
White House spokeswoman Dana Perino said that "there's nothing new on the auto front" as officials reviewed plans for a GM and Chrysler bailout.
GM, the biggest US automaker, and No 3 Chrysler have asked for a combined US$14 billion ($23.6 billion) in federal aid in order to survive until March 31. US sales at Detroit-based GM fell 22 per cent through November, while Chrysler's tumbled 28 per cent, the most among major automakers.
Members of the United Auto Workers union on temporary layoff are eligible to receive 95 per cent of their usual take-home pay, from a combination of unemployment-insurance benefits and a supplement from automakers. Labour costs make up about 10 per cent of the cost of producing a vehicle.
Assembly operations at Chrysler won't resume until January 19 at the earliest, the automaker said, without specifying the size of the cut in output.
Chrysler said its two factories in Toledo, Ohio won't reopen until January 26. A plant in Windsor, Ontario, and the Dodge Viper operations in Detroit will be shut until February 2, said spokesman Shawn Morgan.
The idling of the Ford factories is part of a plan to reduce first-quarter North American production by 38 per cent. Of 15 assembly plants in the region, nine are closing temporarily; three are unaffected; and three are being retooled.
GM indefinitely suspended work on the US$370 million factory in Flint, Michigan, that will make 4-cylinder engines for the Volt and the Chevrolet Cruze small car in 2010.
- BLOOMBERG
