US car manufacturer Chrysler said it would put manufacturing on hold until "no sooner than January 19" as it waits for a government bailout, after President George W. Bush warned he was not interested in "putting good money after bad".
AFP - Ailing US automaker Chrysler on Wednesday said it would temporarily halt manufacturing as demand plunges and the clock ticks down on a hoped-for bailout from the federal government.
Chrysler, the smallest of the Detroit Big Three automakers, and General Motors, the biggest, say they are on verge of imminent collapse unless the government throws them a financial lifeline.
Chrysler said it was halting its manufacturing for at least a month, beginning Friday, in response to a credit crisis and ongoing debate on a government rescue for the sector.
"As a result of the financial crisis, the automotive market remains depressed due to the continued lack of consumer credit for potential buyers," the privately held firm said in a statement.
"Last week several automakers announced significant downward adjustments in production for the first quarter of 2009, and to make sure our inventory remains aligned with market demand, Chrysler will also extend the holiday shutdown already in place."
As a result it said that "all Chrysler manufacturing operations will be idled at the end of the shift Friday, December 19, and impacted employees will not return to work any sooner than Monday, January 19, 2009."
Chrysler said it had informed the United Auto Workers union, employees and suppliers about the actions.
The company said that dealers have indicated "many willing buyers for Chrysler, Jeep and Dodge vehicles" but have been unable to close the deals, due to lack of financing.
The company, which is owned by private equity firm Cerberus, did not disclose the number of employees affected. A company fact sheet said Chrysler employed 63,480 as of September.
Chrysler has 14 assembly plants, 10 powertrain plants, four stamping operations and five manufacturing affiliations outside of North America.
The news came a day after the White House warned that the US auto industry would have to make "concessions" to win a government bailout.
President George W. Bush said late Wednesday he was "looking at all options," according to the transcript of a Fox News interview.
"A disorganized failure, disorganized bankruptcy or disorderly bankruptcy ... could cause great harm to the economy, beyond that which we're now witnessing. And that concerns me," Bush said.
"And the other point is that, I'm not interested in ... really putting good money after bad."
Asked when he will decide the auto question, the president replied: "I'm thinking through, you know, it needs to get done relatively soon."
The Big Three -- GM, Ford and Chrysler -- have warned that without a package of loans, millions of jobs could be lost, which they say would send ripple effects through the nation's already faltering economy.
The automakers have been seeking a bridge loan of some 14 billion dollars to help weather the crisis but it remained unclear if the US government will come up with the funds.
GM said last week it was idling 30 percent of its North American production "in response to rapidly deteriorating market conditions."
US auto sales dropped 37 percent in November amid talk of a potential bankruptcy at General Motors or Chrysler should Washington fail to deliver a massive bailout package.
Date created : 2008-12-18