Chrysler, whose US sales in September dropped 5.4% year on year, is temporarily shutting down production at more factories, according to an internal company memo obtained by the Detroit Free Press newspaper.
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The paper noted that the Auburn Hills automaker had already announced last Wednesday that an engine plant in Dundee would be down for one week and an assembly plant in Belvidere, Illinois, would be down for two weeks, beginning next week.
The Chrysler memo, dated Thursday (4 October), added three more plants were to close next week, including the Jefferson North Assembly Plant in Detroit, where the Jeep Grand Cherokee and Commander are made, and a truck plant in Warren, which assembles the Dodge Ram, the Detroit Free Press said, adding that Chrysler also plans to idle its Toledo North Assembly Plant which began production of the new Jeep Liberty [Cherokee outside North America] in July. Just last week, Chrysler held an event to celebrate the production launch at the factory, the paper said.
Six other factories do not have any overtime scheduled for next week, the memo was also reported to have said. These are Conner Avenue Assembly Plant in Detroit, Sterling Heights Assembly Plant in Sterling Heights, Toluca Assembly Plant in Mexico, Newark Assembly Plant in Delaware, the Saltillo plant in Mexico and St. Louis South Assembly Plant.
According to the Detroit Free Press, Chrysler spokeswoman Michele Tinson attributed the shutdowns to “adjusting production to meet tough market conditions”.
The paper noted that, earlier this week, Chrysler vice president of US sales Darryl Jackson said the automaker’s US sales were affected by a more than 20% decrease in fleet sales during September, compared with the same month last year.
“They’ve certainly got to cut back. They are just producing too much,” Erich Merkle, director of forecasting for IRN, told the paper, adding that a shutdown at Toledo North just as production was beginning on a new vehicle, was not a good sign.
“Even though they came out with the all-new Liberty, the competitive landscape has still changed internally at Jeep in the fact that they’ve got this four-door Wrangler out there,” he told the Detroit Free Press which noted that Wrangler sales were up 78% last month compared with September 2006.
