Chrysler Group LLC is shutting its two Canadian assembly plants and four other North American assembly plants for extra downtime this month and in January after a dismal sales performance in November, in stark contrast to big production increases at Ford Motor Co. and General Motors Co.
The shutdowns at Chrysler's Brampton and Windsor plants in Ontario include the three days before Christmas and the first two weeks of January.
A pickup truck plant in Warren, Mich., will shut for almost a month, while one factory in Belvidere, Ill., and two in Toledo, Ohio, will close three days early for the Christmas break and will stay shut the first week of January, said industry sources familiar with Chrysler's production plans.
The cutbacks come after a 25 per cent drop in the company's sales last month from year-earlier levels, which was actually better than the 38 per cent decline in the first 11 months of 2009.
Ford said last week that it will boost first-quarter production by 58 per cent, while GM announced a 75-per-cent jump.
Chrysler spokesman Max Gates said the holiday break will begin early at some plants and will be extended at others.
Chrysler has vowed to keep inventories under control, reduce profit-sapping incentives, and refresh or redesign 75 per cent of its product offerings by the end of next year under its new owner, Fiat SpA.
That plan will lead the company to break even in operating profit next year and on a final profit basis in 2011, the company reiterated.
But those financial numbers are underpinned by expectations that Chrysler will reverse its U.S. market share losses and jump to 13 per cent of the market by 2014 from less than 9 per cent this year.
That's a tall order, with a recovery in market share doubtful next year because of few new Chrysler vehicle offerings and only a slow rebound expected in the market, analysts said.
“We're talking about a soft market and extreme competition,” said William Pochiluk, president of consulting firm AutomotiveCompass LLC.
“Chrysler has a rather aged set of products in the most popular segments,” Mr. Pochiluk said.
The three cars made in Brampton, the Chrysler 300, Dodge Charger and Challenger, slumped 44, 38 and 39 per cent respectively last month.
Rick Laporte, president of local 444 of the Canadian Auto Workers union, which represents about 4,500 workers at the Windsor minivan plant, said he was told that the shutdown is related to retooling and upgrading equipment, not a sales slump.
The Dodge Caravan and Chrysler Town and Country minivans were two of the auto maker's better performers last month with an increase of 35 per cent in Caravan sales and a dip of 3 per cent in Town and Country deliveries.
Chrysler said last month when it laid out a five-year product and financial plan that the two vehicles will receive major modifications in 2010.
But they will be up against redesigned Honda Odyssey and Toyota Sienna minivans, including a Sienna with a four-cylinder engine, the first time Toyota has offered an engine smaller than a V6 in its minivan and an indication that the fuel economy race is heating up.
