“We have a model that is buy, fix and hold,” Timothy Price, managing director of Cerberus, told the Financial Times last Thursday. “It is not a problem for us to have a 10-year holding period.” Riiiiiight. The FT reckons "Chrysler was forecast to lose $1.6bn last year following a $1.4bn loss in 2006." This year's sales are a 9mm slug to Chrysler's chest. With no immediate or even medium-term prospect of undigging that hole, and ChryCo banking a $2b loan, TTAC sources have reiterated their belief that the company-wide summer vacation signals the end. The Canadian Press reports that Chrysler "told workers in a memo on Wednesday that the Toledo North Assembly Plant, which makes the Jeep Liberty and Dodge Nitro midsize SUVs, will be shut down for seven weeks from July 7 through the week of Aug. 18 due to sagging sales. The Newark, Del., Assembly Plant, which makes the Dodge Durango and Chrysler Aspen SUVs, was shut down starting Monday for five weeks, with workers scheduled to return Aug. 4, and the Warren truck plant, which makes the Dodge Ram pickup, will close for five weeks in late June and July." Normally, these are one to two week breaks. This time, the rumor mill insists, they will be permanent. [NB: the August third "hard stop" represents the last day Cerberus can sue Daimler for false conveyance.]
Find Reviews by Make:
Read all comments
I guess we will know on August 4th then.
Call me crazy, but I don’t think Chrysler will declare C11.
Oh MY!!!!!!!!! How in the world are we going to survive without the Jeep Liberty, Dodge Nitro, Durango, Aspen and that wonderful, fuel efficient Dodge Ram??????????
Perhaps the vacation should extend until Ceberus Motor Kars decides to build a “decent” automobile.
I guess I only have one more months to say goodbye to my favorite automaker. :(
BTW, I believe that most of Chrysler’s current product line is crap. Only a few models are good. I mainly like them for their clever designs of the past. Like the 90s. Even if they had poopy transmissions, you got to give Chrysler credit, as the designs were quite clever and well thought out.
On what ground could Chryslerbus to commence court action on Dumbler?
Even Dumbler herself cannot guarantee any of her car can sell. Neither Slick Rick no Mulally.
Ferrariman: Mr. Farago has provided many reasons for why ChryCo might file; what's your reasoning that they won't?
Did anyone notice these are truck/SUV plants? I can’t speak for all plants, but I know that Brampton Assembly [Home of full sized cars] is not shutting down any longer than its normal two weeks. I know Chrysler is on the ropes big time, but all this negative speculation is just that. I’ll bet you Chrysler is still plugging away come Aug. 4th.
factotum:
Call it a hunch, that’s all. I just don’t see them filing for C11. If they do, though, I’m guessing that the politicians will do whatever they can to ensure that the Chrysler brands stay in American hands. Call that one a hunch based on the Anheiser-Busch/Inbev brouhaha…
Someone who knows, come on out and spill the beans. The suspense is too much.
There is nothing unusual about a two week car company shutdown in the summer, nothing unusual about shutdowns being extended for slow selling vehicles, and no reason to correlate either event with a pending bankruptcy filing. That’s not blood in the water, its red dye #2
A .9 mm slug? That’s tiny! Won’t hurt a bit. Freudian slip, RF?
Darn metric units, eh?
There’s also the fact they are sending the white collar guys home too unless they are essential.
And a C11 is a reorganization. You don’t cease operations in a C11.
I’m new to this blog and I just wanted to say your are the man. I’m very impressed about the reporting on GM, F, and now Chrysler. Very impressed and with daily updates too it seems like. I was expecting GM to go bankrupt first, but Chrysler is also in a dire financial situation. Once those plans shut down its game over IMHO.
Nothing unusual about shutdowns in the summer. All the plants normally shut for two weeks in the summer for model changeover. Just extending the shutdowns since the product isn’t selling. The lack of sales not the shutdowns is what will cause the bankruptcy. the real problem is that their new car products are junk. Give Lasorda a bonus for that. edit: they already did that
Anyone that works in an auto plant can tell you that a summer shut down for two weeks is normal. Additional time off when sales slump is also normal, given the current market conditions it shouldn’t surprise anyone that truck plants would have more downtime added.
Shutting down the auto plants over the summer is normal as everyone has stated. But why the mandatory vacation for the white collar workers especially in the situation the are in right now. Even if ti’s to save a fewbucks on payroll it still doesn’t make sense for the long term. Is it realy smart for them to be sending home designers/engineers/marketing/etc. whent hey need them to be busting tail the most. They need to fix the crap they are selling now and come out with better products, that’s kind of hard if everyone is gone on vacation. Everyone outside of the assembly line should be working triple time fixing whats wrong to save the company, fighting for survival.
I’m with RF it’s strip and flip time and they just don’t want anyone to catch on to that before they file.
Redbarchetta :
... They need to fix the crap they are selling now and come out with better products, that’s kind of hard if everyone is gone on vacation. Everyone outside of the assembly line should be working triple time fixing whats wrong to save the company, fighting for survival. …
A friend of mine who works for Mopar (Chrysler’s parts and service division) told me that Chrysler quietly rescinded its decision to send the salaried folks home on shutdown for a week or two around July 4. The people whose job it is to improve the products will be hard at work the first week of July, unlike their counterparts at Ford who are home for a week during the Research and Engineering Center shutdown.
Engineer :
Remember the movie Scanners? Yeah…
A friend of mine who works for Mopar (Chrysler’s parts and service division) told me that Chrysler quietly rescinded its decision to send the salaried folks home on shutdown for a week or two around July 4. The people whose job it is to improve the products will be hard at work the first week of July, unlike their counterparts at Ford who are home for a week during the Research and Engineering Center shutdown.
That is true.
So why did Chrysler run Toledo on overtime this past week if they were going to shut down for over a month?
Please, please, let this be true. What product do they make that anyone would miss? I would feel for the blue collar workers though.
Women and Children to the lifeboats.
Acd :
June 30th, 2008 at 12:07 am
So why did Chrysler run Toledo on overtime this past week if they were going to shut down for over a month?
To reach a preset production number before shut down. I know it makes little sense, but they do this in plants all the time.
Chrysler will not be filing C11. The mandatory vacation is the cheapest way to improve cash flow without having to lay off, and the plants that are being shutdown for 5-7 weeks are for vehicles that have 100+ days of inventory.
On August 4, I will be the first to come on here and say TTAC was dead wrong. Count on it.
I didn’t know that A-Rod posted here. How’s the money George and Hank giving you doing?
The Liberty is a very good vehicle. The last model (the KJ) was a best seller in it’s class. What is killing it now and most of Chrysler’s vehicles is MPG. Their product line includes mostly below average MPG vehicles.
I do not understand why the Big 2.8 has never tried to take on a car as well built with the great MPG like the Civic? Well, of course that would mean that the UAW would have to build it, to answer my own question. ;)
It’s not the UAW’s fault, any more than British Leyland was the fault of the unions. The unions didn’t help, but they’re not the root of the problem.
It has been written before: the Big 3 were run almost completely incompetently. GM, led almost exclusively by imperial bean counters since approximately 1959. Ford, forever a stratified company of fiefdoms, taboos, and political intrigue. Chrysler, chronic underinvestment in (earlier) styling and (later) R&D.
I think Honda would find a way if they had no choice but to deal with the UAW.
St. Louis minivan plant shut down too: http://online.wsj.com/article/SB121484581164616365.html?mod=googlenews_wsj
The article says workers were sent home early today. More time to look for a new job, I suppose.