Chrysler plants to go on idle mode

The slowdown in demand for vehicles has come as blow to auto major Chrysler, with the automaker deciding to shut four plants temporarily. The shutting down of the four facilities in the US would begin on Monday.

The car maker which had been hard it by the troubled state of affairs in the economy couldn’t do anything better to stay in the scene, feel industry sources. The decision is seen as taken in the backdrop of extremely hit market conditions. With the number of orders for vehicles continuing to plummet, it had no other go. Chrysler, which is 80 percent-owned by Cerberus Capital Management, had to go in for such a decision as it had been finding no bookings coming in for its vehicles, said a report.

The company will be halting operations, though temporarily, at its US plants located at Sterling Heights, Michigan, Belvidere, Illinois, Conner Avenue in Detroit and Brampton, Ontario. The Belvidere plant manufactures models such as the Dodge Caliber, Jeep Patriot and Jeep Compass SUVs, while the Sterling Heights factory builds the Sebring and Avenger sedans. The Brampton plant builds the 300, Charger and Challenger sedans while its Conner Avenue plant in Detroit builds the Dodge Viper.

It may be recalled that the car maker, which had been pushed into troubled times by the bad market conditions, had availed of an emergency loan from the US government, to the tune of $4 billion. The company had reported an US sales decline by 30 percent in 2008 and 55 percent in January. It had earlier shut down all of its 30 manufacturing facilities for a month from mid-December.

It is being said that the company would be able to reduce inventory expenses on inventory, and cost on components when the idling of the plants begin. It is also expected that the temporary idling of the plansts in the United States might help Chrysler to avoid finished vehicle inventories from piling up on dealers.