Chrysler Shuts Down All Production
Friday will be the last day of production as Chrysler shuts down for 30 days — citing lack of available consumer credit.
CNNMoney says that all 30 of the company's plants will shut down and employees will not return until January 19th. Ordinarily, the company shuts down production for about two weeks — from Dec 24 - Jan 5. The employees will not receive their full paychecks.
The company said that there are many willing buyers out there — but no available credit.
"Chrysler dealers confirmed to the company at a recent meeting at its headquarters, that they have many willing buyers for Chrysler, Jeep and Dodge vehicles but are unable to close the deals, due to lack of financing," the carmaker said in an announcement. "The dealers have stated that they have lost an estimated 20% to 25% of their volume because of this credit situation."
Chrysler shuts down all production [CNNMoney]
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I find this somewhat hard to believe with nearly every other car company screaming off the top of their lungs that they're offering financing to potential customers ("So don't worry about the credit crunch folks, cause we got the credit for YOU!").
Friday may well be the last day of Chrysler's long,mostly unhappy life. Once the lines shut down for that long,suppliers will start collapsing and sales will sink further because of missed "opportunity" sales. Buyers will be wary of buying from a company that appears to be dead. That lifetime warranty that I warned you about some months back ? Well , maybe 'Ol "touch of death" Bob Nardelli will come over to your house and help you winch the 2.7 litre engine out of your Jeep Patriot when it blows a head gasket.
I hope Cerberus Capital (ChryCo's current owner) loses every fucking dime that they sunk into this shitbag.They should have to pour in more of their money before we have to pour in any of ours.
I still can't get over how GM even had the balls to take out a full page ad saying they knew they were putting out crap.. sorry "subpar" vehicles. The big three deserve to rot. And for the credit thing I just bought a 2008 Jeep Grand Cherokee from a Jeep dealership in my area and financed it with 0 Down! I think this is such a load of crap it's disgusting. Why did MOST of America think they could keep borrowing without any regard to how they were going to pay it back? I got a mortgage 6 months ago. I Pay my bills on time. I TRY not to overspend. Pay your bills on time, be a responsible citizen and stop asking what the government is going to give you for free. Stop worrying about how much more credit you can get. This country is going to hell in a handbasket. Sorry for the rant..
Yeah,when highly paid CEO's show up on C-Span to demand the money that I worked for so that they can build shabby,unreliable cars,I do need a hug...And a stiff whisky.
An add on to the story is that Chrysler stopped their finance division. Seems that the money for financing the buyer is tied to a pool of money needed to pay debt. Wonder if the extra 2 weeks of shut down is to figure out the finance side of things as well.
Oh, and don't cry for the auto worker. The last I knew they got 90% of their pay during down time. Sorry about the hate in that, but I know some ex auto workers from the 90's. With the work ethic they showed I'm surprised the auto industry didn't shutter their doors decades ago.
It seems an odd coincidence that Chrysler was asking Congress for a 7 billion dollar loan. The EXACT same price Cerberus paid Daimler for their stake in Chrysler.
Yep, Bob Nardelli has messed up again. He's not fit to run a fast food franchise. Can we put Six Sigma Cargo Cult to rest?
@quail: " Don't cry for the auto worker." I can't do that. I had a friend that couldn't find work with a masters in aerospace engineering, in the Space Coast area of Florida no less, and ended up working at an auto plant because he needed money.
He was making more than if he got a starting job in his industry, I kid you not.
They got into this mess because they overpaid their workers, overpaid them after they stopped working (retired), and even when they weren't working. How long did they expect this to last?
Say what you will about Detroit cars (and I usually do to), but this sucks balls for those families that have to do with a smaller paycheck this holiday season in this economy :)
@dohtem: God forbid they get paid 45 bucks an hour to do squat instead of 70 bucks an hour to turn wrenches. Meanwhile, I work long hours at 1/2 their "shutdown" pay.
But I'm not bitter. No siree bob!
Part of me feels bad for all the families that could lose jobs over this. However, the other part of me doesnt. These three companies have made crap for a long time. People working there should have reailzed they were making crap and jumped ship BEFORE it started to sink!
Ding ! Ding ! Ding! Ding ! Exactly ! You nailed it.
The greedy assholes at Cerberus wanted to get their money out of this twitching corpse and leave the rest to rot. For once in my adult life,I am getting to see these "masters of the universe" get stuck with a turd like they usually stick us. And so far, it feels pretty good.
Now. Money talks. And these guys didn't get insanely wealthy by being stupid. They may still find the escape hatch and come out money good on this whole "Rent a failing car company" thing. But if they end up eating this investment, I will personally throw a party. You're all invited.
@m4ximusprim3: I really don't think the figures are that high anymore. Not with the big 3 laying of the union workers and hiring non union workers to take their jobs for half.
At least their customers will still get their $2.99 Gas for a couple more years!!!!
@dohtem: Actually I think they have added about 3k jobs at the new lower wage but those people may get cut when the layoffs come around
"If you can find a better car, buy it" - Lee Iacocca.
@katieoh: Michigan's been on borrowed time since 2006 when we first started operating on a negative budget (gov't-wise). Michigan's been borrowing from the Fed for almost 3 years now.
@SOhp101: Have you tried to get some of that credit? I haven't, but friends have, and even with great credit and income, they are out of luck.
@SOhp101:
Credit to buy their vehicles with, or credit for you to buy other things with?
Because if Chrysler "lends" you $20,000 to buy their car, they're not actually spending a penny. The car already exists, they're just moving their inventory around. At least once they push the car into your hands they have a new $300+ a month revenue stream, and really at virtually no cost to them.
Now this isn't quite as dire as it sounds. They shut down every Christmas for at least 2 weeks. They're just extending a little this year. Not good, but not the end of the world...yet.
The biggest mistake Chrysler ever made was merging with Daimler. Do you want to place blame? Place blame on the idiot that approved the merger with Daimler, and blame Daimler who drained Chrysler's bank, broke all of the promises they made, and then dumped them once the money was gone. Chrysler had huge plans, and Daimler promised to make those plans come true. F*** Daimler, and F*** the idiots who came up with this grand plan to merge when they had 900 million in profits in the bank alone.
The UAW employees will receive 95% of their salary.
@JeffMc: But they won't be getting their full pay like they usually do for shut-down, that's the difference here. And those who are part-time (which is a lot of people, because Chrysler has been hiring people as "part-time" for close to 5 years now, to cut back spending on their employees basically) get nothing.
@zigziggityzoo: And yet we reelected our Canadian governess of our own free wills. People bitched about Engler, but the state worked for the majority of people (only the people left behind complained).
It's not the few people that actually build cars that will cause a crisis (and it's 85%, by the way). It's the engineers and associated companies such as suppliers that will result in a domino effect of eventual depression.
Doesn't anyone realize that the transplants were also lobbying Congress to authorize the auto aid bill to the Big 3?
@Snarkysnake: Cerberus Capital? Really? That is rich.
(Κέρβερος, Kérberos) is the name given to the entity which, in Greek and Roman mythology, is a multi-headed dog which guards the gates of Hades, to prevent those who have crossed the river Styx from ever escaping.
@Snarkysnake: Maybe so, but don't forget that Chrysler was pretty flush with cash before Daimler came calling. If you want to assign some blame, there's plenty of worthy targets over in Germany.
I knew as soon as I saw those stupid $2.99 gas deals that gas was going to be heading south.
United Auto Wreckers
I dont think these companies are well run. I think their products are mostly crap. I wanted to buy American, but frankly the cars arent worth the money- for example- the Saturn hybrid- more expensive and less mileage than a Prius.. why bother?
I do feel bad for my family members that work in this industry.. they arent design engineers- they work hard and now they are screwed because the company didnt change with the times. Many more people than the employees themselves are going to pay for this lack of innovation. We are all going to be looking for jobs at Walfart and Micki D's, because we are not going to make a single thing in this country except large piles of plastic trash and poo.
well auto industry, stop failing at business and whining for free money to keep up the fail.
i seriously want whatever drugs these ceos are on. it's a wonderful sounding oblivion where your actions have no consequences and you still get cash thrown at you.
@JeffMc: Holy crap, two weeks? My bosses act like they're doing me an enormous favor for 'allowing' me to take vacation time on Christmas Eve!
If only I were so lucky!
@concordia: That's why unions suck ........for companies.
I'm in the same boat as you, luckily my boss has become a good friend of mine.. but otherwise i would've been screwed.
In other news Banks are issuing holiday bonuses based off how much they screwed the government for.
@ideagirl: There is no shortage of '08 or '09 Mercedes, BMWs, and Audis on the road where I live. And even though this is an affluent area, not many people are paying for those cars in cash. Credit's not the problem. The problem is most people that make money that have good credit don't buy Chrysler cars. It's been a totally different demographic that's been buying American for the last 20 or so years. And that demographic is leveraged beyond belief. So they might have a good income, and they might have good credit, but their debt to income ratio is probably jacked up beyond belief.
I bought and 08 Jeep patriot after I got rid of my 15 year old 93 Jeep. My American car is fine.
@Snarkysnake: Just what I thought when I heard it. I figured they had just given up and shut it all down for good as a last gesture of good will. In my mind, the whole "1 month" bit was just to hold back the panic.
And oh, there will be panic. The mob has been stirred. If the big three had just kept their mouths shut and died peacefully in the night, the world might be much better off.
Actually, the reason for the shutdown is to force people to burn vacation time, so it's easier to coordinate projects.
Also, the level of vitriol towards the American auto industry here is kind of startling, lol.
@SOhp101: Those "credit come-ons" are just baloney to get you down to the dealership. They don't know if you will get a loan or not, (probably "not" these days) but no lookers = no buyers, it's all a numbers game.
It's just like shotgunning out crappy credit cards. You may qualify for $3000 line of credit! (or not, minimum credit line = $200.00).
When our credit was really in the dumpster we went to the place that basically promises "we will get ANYONE financing" -- well, except us. Yeah, well OK then. That was an afternoon I'll never get back.
Bottom line is that they promise anything just to get you in the door. Kinda like politicians.
If the government fronted all of that bailout money to banks and financial institutions so consumer credit wouldn't dry up, why has consumer credit all dried up? Where did the money go?
When are we going to haul the banking industry execs' asses back in front of congress to explain why they aren't holding up their end of the bargain?
well, michigan, you had a good run.