Chrysler to idle more factories

Temporary closures to help slow production

October 5, 2007

BY TIM HIGGINS | FREE PRESS BUSINESS WRITER

Chrysler LLC, which saw its U.S. sales drop 5.4% in September compared with the same month last year, is temporarily shutting down production at more factories, according to an internal company memo obtained by the Free Press.

The Auburn Hills automaker announced Wednesday that an engine plant in Dundee would be down for one week and an assembly plant in Belvidere, Ill., would be down for two weeks, beginning next week.

The Chrysler memo, dated Thursday, added three more plants to close next week, including the Jefferson North Assembly Plant in Detroit, where the Jeep Grand Cherokee and Jeep Commander are made, and a truck plant in Warren, which assembles the Dodge Ram.

Chrysler also plans to idle its Toledo North Assembly Plant. The plant began production of the new Jeep Liberty in July. Just last week, Chrysler held an event to celebrate the production launch at the factory.

Six other factories do not have any overtime scheduled for next week, the memo said: 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.

Chrysler spokeswoman Michele Tinson attributed the shutdowns to "adjusting production to meet tough market conditions."

Earlier this week, Darryl Jackson, Chrysler vice president of U.S. sales, said the automaker's U.S. sales were affected by a more than 20% decrease in fleet sales during September, compared with the same month last year. The company declined to give a more specific number.

Vehicles the Belvidere plant makes -- the Dodge Caliber and Jeep Compass and Patriot -- had a rough September. Compass sales were down 19% compared with September 2006, for example.

"They've certainly got to cut back. They are just producing too much," said Erich Merkle, director of forecasting for IRN Inc. He added that a shutdown at Toledo North just as production was beginning on a new vehicle is 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 said. Wrangler sales were up 78% last month compared with September 2006.